EURUSD forming Head and Shoulder again at 1.1075 area but certain Bullish intervention may occur. The price is consolidating at the edge of Neckline support while trying to push higher in the process. Let’s check EURUSD Technical Analysis for more levels and insights.
January 22, 2020 | AtoZMarkets.com – EURUSD has been in a Bearish trend since the price rejected off the 1.1175 resistance area. Despite certain volatility, the price managed to push consistently lower leading the price below 1.1100 area. The price is currently correcting at the edge of 1.1075 with certain Bearish rejection indicating upward momentum in the making.
Recently, U.S. president Donald Trump stated that “U.S. economy would have grown at 4% pace if Federal Reserve did not raise the interest rates”. Despite the GDP increase at 2.1% rate, USD is struggling to maintain momentum against majors like EURO and POUND. Ahead of ECB Policy rate decision tomorrow, certain weakness on the USD may lead EURO Bulls to start regaining position.
Though ECB may keep the policy unchanged but certain positive outcome may lead EURO to gain inevitable momentum. If EURO manages to regain momentum after ECB Policy Meeting then it may sustain a strong Bullish pressure in the coming days.
Euro to take over USD now?
EURUSD bouncing off the 1.1075 area does indicate that Bulls are currently trying to take over the Bears. The price formed Double Bottom pattern while trying to penetrate below 1.1075 area with intraday price action. On the contrary, the prices form Bullish Divergence along the way while Double Bottom pattern was in the making.
image: EURUSD 1 Hour Chart
The price recently rejected off the 1.1075 area for 2 times and currently trying to push higher. Despite having Kumo Cloud, 20 EMA, Tenkan and Kijun line holding the price as resistance, such Bullish pressure may sustain but remain weak. Until price breaks above 1.1100 area which will also devalue the dynamic levels, Bullish momentum cannot sustain further.
Though MACD lines formed Bullish Divergence while price was struggling to break below 1.1075 area, a break above 1.1100 is currently mandatory for EURO Bulls to regain momentum. As per current situation, a break below 1.1075 area is a must for continuation of the Bearish trend in place. On the contrary, the price breaking above 1.1100 may lead to continuation of EURUSD Bullish pressure.
EURUSD formed Head and Shoulder
EURUSD formed Head and Shoulder reversal pattern with a neckline towards 1.1075. The highest peak i.e. Head is residing at 1.1230 area from where the price pushed lower impulsively and created a new lower high as Second Shoulder. The price is currently struggling to break below the Neckline support at 1.1075 as certain Bullish intervention is observed.
image: EURUSD Daily Chart
According to Daily chart the price has greater probability to break below the Neckline support and push lower towards 1.0920 area as per measured objective. So, if the Head and Shoulders Neckline is broken with a daily close today or in the coming days then the price is expected to have drastic fall towards 1.0920. As the price remains below 1.1100 area, the Bearish Bias is expected to continue.
To Conclude, EURUSD is all set to break below 1.1075 Neckline Support. A break below with a daily close may push the price towards 1.0920 support area in future.