Oct 22 2018

EURUSD – Head and Shoulder Pattern

A bearish price reversal pattern is seen on the 4 hour chart of EURUSD, A head is formed with left and right shoulders. At present the pair seems facing resistance of 50 period Exponential Moving Average (EMA) at the peak of right shoulder and is trying to reach the neckline support of HNS pattern, which stood at 1.14 mark. On a conservative break of neckline, it can probably drag the pair lower by 300 pips from the breakout zone. Momentum indicator 14 period – Relative Strength Index (RSI) crossed  below 50 mark is indicating that the strength of bulls are losing momentum, whereas bears are gathering strength. 1.14 is a level to watch for, as once it breaks we can see a sharp fall in Euro against the US. dollar at least towards 1.11 mark.