E/U: I noted weeks ago that the E/U seemed to have formed a weekly chart bearish H&S pattern. The ‘neck line’ of this pattern was at 1.35, the ‘height’ was at 1.40 and so the follow through target was extrapolated to be at 1.30. This move has already delivered over 340 pips of the expected 500 pip move.
There is high impact EUR data scheduled for later tonight with CPI Flash Estimates. A positive data print here might help to support the E/U and stop the slide. If not, I’d be suspecting the H&S target of 1.30 might be attempted. There is a lot of high impact USD and EUR data scheduled for next week as well if the CPI data fails to shift this pair.
E/U weekly chart showing the bearish H&S:
E/U weekly Cloud: price is still below the Cloud. Note also how the H&S target of 1.30 is also near the 50% fib level of this latest move:
E/U 4hr: no momentum here at the moment but traders will be keenly watching CPI Flash Estimate data that is due out later tonight.
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