The EUR/USD pair has formed a head and shoulders pattern on the hourly chart with neckline currently threatened. My preference is for break and more downside with the target for the move at 1.2170 and the weekly pivot at 1.2160 – so perhaps 1.2165; a break below the 76.4% retrace of the previous rally at 1.2185 would be a major blow to bullish hopes. The possibility of another leg higher to 1.2305 is also quite strong with a break above 1.2243 issuing a strong continuation signal higher.
Written by Forex4you