EURUSD Is Poised for More Downside With Reversal Pattern Formation

Price Analysis – EURUSD Is Poised to Fall Further With a Head and Shoulder Pattern

EURUSD is poised to fall further after it conformed to a head and shoulder reversal pattern. Since the beginning of May 2021, prices have been rising. The price only retraced for a period between the 10th of June 2021 and the 10th of July 2021, where it gained support at 1.1160 before it continued its bullish movement.

Its momentum helped it effortlessly break beyond the 1.1600 resistance, but it was strongly resisted when it got to the 1.1930 key level. It eventually broke through and fell back instantly, producing the first shoulder. EURUSD had to fall back for support at 1.1600 a couple of times before it finally broke out beyond 1.1930.

The price got to the 1.2270 key level where it confronted a strong weekly resistance and it finally broke out of it on the 6th of January but also slumped immediately under pressure, leaving another isolated peak. The market fell beyond 1.1930 to a point where it formed a neckline with the other previous major retracement.

The price went up once more to test the 1.2270 resistance. It bounced off it just once to form the third crest, at which point the bulls got exhausted completely, and now, the price has now fallen strongly, beyond 1.1930 support, and is now poised to reach the existing neckline.

EURUSD Key Levels

Resistance: 1.2270, 1.1930
Support: 1.1600, 1.1160

All indicators show that the EURUSD is poised for more downside. The 9MA (Moving Average) is positioned above the daily candles as support for more falls. The MACD (Moving Average Convergence Divergence) has its red signal line just above the zero mark, showing more scope for downward movement.
On the four-hour chart, the market is retracing before it continues its descent, and could retrace back to the 1.1930 resistance from where it is expected to plunge beyond the neckline for a confirmation of the head and shoulder reversal pattern.

Note: Forexschoolonline.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.