- Summary:
- EURUSD head and shoulders pattern shows possible weakness should the pair break below the pattern's neckline. 1.2150 remains key to the downside.
The EURUSD pair looks poised to end the year at the highs despite forming a bearish pattern – a head and shoulders formation. This year much of the price action in the pair was due to Brexit hopes – and Brexit finally arrived.
Market chatter the other day pointed to an imminent deal, and rumors continue to circulate that we will have one until Christmas. While no one knows the exact conditions, many are relieved that Brexit is done, and with a deal in place, the trade between the two sides would not be as distorted as many feared.
EURUSD Technical Analysis
The EURUSD pair reached a high of 1.2270 earlier in the month and then consolidated. From a technical perspective, the consolidation looks like the right shoulder of a head and shoulders pattern, but it can easily act as a triangle that breaks higher. As such, the ideal way of trading this is to wait for a breakout before going short or long.
Bears may want to sell on a break and close below 1.2150. On such a move, the 1.2270 high serves as the perfect stop-loss, while 1.19 is the right target. Bulls, on the other hand, may want to buy a new 2020 high, should that be the case, as such a move will signal more strength ahead.
EURUSD Price Forecast
