EUR/USD forms bearish double-top pattern at yearly highs near 1.12

EUR/USD has developed a concerning bearish divergence double-top formation at its yearly highs, signaling a potential reversal in the pair's longer-term uptrend. The technical pattern, which typically indicates exhaustion in buying momentum, suggests the euro's recent rally against the dollar may be losing steam. The formation completed near the psychologically important 1.1200 level, a zone that has acted as strong resistance multiple times this year. RSI divergence confirms the weakening momentum, with the indicator failing to make new highs alongside price action. This technical setup often precedes significant corrections, with initial downside targets around 1.1050 (38.2% Fibonacci retracement) and 1.0980 (50% retracement). The pattern's validity would be confirmed by a daily close below the neckline support at 1.1080. Traders should also monitor upcoming ECB and Fed policy decisions, as any hawkish surprises could accelerate the reversal. The double-top formation suggests a shift from the bullish trend that dominated earlier trading periods.