EURUSD – Head & Shoulders

As stated a couple of weeks ago, EURUSD retested the confluence of resistance levels in the 1.1860-1.1870 area, however the downtrend remains intact and we continue to target the 200 day moving average neighorhood which sits at 1.1220. – This next move lower should help bring the pair slightly more in line with curve spreads, the correlation of which broke earlier in July this year.

We remain of the view that the break of major support levels slightly above 1.18 a few weeks ago which include the head and shoulders neckline, pivot off which the 76.4% Fibonacci level was formed and the 55 day moving average (all converging in the 1.1860-1.1870 area) will act as strong topside resistance.

A close below 1,1680 is a bit away and the price would target a move towards the 1.1330 area

Trade CodeEURUSD-0001
Stop Loss1.1900
Take Profit1.1385
CommentsAllow several weeks for the trade to develop