EUR/USD fell under pressure in early North American trading on Tuesday after briefly touching a three-week high. The pair has given up early day gains after once again failing to break above the 1.1700 handle on a sustained basis. Price action in the currency pair over the week ahead could be important as a technical pattern hints of a reversal from the strong bearish trend seen earlier in the year.

The reversal lower in EUR/USD today follows a test of a confluence of resistance that includes a Fibonacci level and horizontal level as well as a level from a technical pattern. The 76.4% Fibonacci retracement originates from June highs and is found at 1.1722, just a few pips below today's high. Horizontal resistance comes in at 1.17140 and reflects the 2015 high. The technical pattern that has formed in the exchange rate is an inverted head and shoulders pattern, and the neckline has now capped rallies twice. The pattern began developing in July, and a sustained break of the abovementioned resistance points to a measured move target of 1.2150.

On Friday, the pair turned lower from the neckline and dropped toward support found near 1.1616. The decline likely surprised market participants, given the momentum behind it, enticing some to reconsider the bullish dollar trade. Today's brief rally above Friday's high looks like it may have taken out some weak short positioning from Friday. The sharp decline that followed reinforces the notion that strong selling pressure remains just above 1.1700, at least in the near term.

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While EUR/USD technically remains within a range, technical price action in some other cross rates are providing a clearer signal. The Antipodean currencies could be providing a tell, as AUD/USD and NZD/USD have strengthened their inverse correlation with the U.S. dollar index (DXY) since last week. Both pairs had traded heavy since mid-August, despite DXY reversing decisively lower. The divergence and subsequent convergence could be signaling that a near-term bottom is in play for both of the pairs. GBP/USD, although affected by ongoing Brexit headlines, is also seen moving decisively higher. On Tuesday, the pair traded at its highest levels since the end of July, recovering about 4% from lows printed in August. Similar to EUR/USD, the pair is also facing resistance as the upper bound of a channel has come into play. The trend channel has encompassed price action in the recovery rally taking place from mid-August lows.

USD/JPY is seen fighting against the grain as the pair is lifted by a strong recovery in the global equity markets on Tuesday. The pair is worth keeping an eye on considering the recent bullish break in the Nikkei above a horizontal level that had held it lower on four attempts since May. As well, a 19-month bear flag pattern is in play on the Japanese yen futures weekly chart. In the early week, the Japanese yen is the weakest and the only major currency that has not gained against the greenback.

Downside support in the near term for EUR/USD is found at 1.1616. The horizontal level has acted as support and resistance since June and is considered strong, as it carries confluence with the 20-day moving average. A range has been in play between this level and upside resistance just above 1.1700 over the past four sessions. A bullish break shows the next level of upside interest at 1.1838, a level that held the pair lower on two attempts in the first half of June. This week's close will be important as the 20-period weekly moving average comes into play, currently residing at 1.1650.