EUR/USD Price Forecast November 13, 2017, Technical Analysis

EUR/USD daily chart, November 13, 2017

The EUR/USD pair has been very noisy during the trading session on Friday, seeing both bullish and bearish pressure occasionally. We did eventually reach towards the 1.1675 handle, but started to roll over again. I recognize the 1.17 level above as massive resistance, because of the level serving as a neckline for a significant head and shoulders pattern on the daily chart. However, the United States Congress looks very unlikely to be able to get tax reform done in a timely manner, and that of course works against the value of the US dollar. Because of this, we are starting to see the US dollar selloff a bit.

I think this sets up a very interesting trade. If we can break above the 1.1725 handle, that negates the entire head and shoulders pattern, and could send this market looking towards the highs again, which is all the way to the 1.21 handle above. However, if we fail and cannot break above the 1.17 level, the market could roll over and continue to go much lower, fulfilling the measurement of the head and shoulders pattern, reaching towards the 1.13 level underneath. That is also the scene of the 50% Fibonacci retracement level from the larger move, so I think that we have a couple of clear scenarios, it comes down to the 1.17 level either offering the resistance necessary, or giving way for the buyers to take over. My suspicion is this will be a reaction to headlines coming out of Congress over the weekend, and therefore we could get the move reasonably soon and early during the trading session. The only thing I think you can count on in the short term is going to be choppiness as there are a lot of unknowns.

Written by FX Empire