EURUSD Technical Chart Analysis
Head and Shoulder Analyzed
|Daily Head and shoulder pattern|
The daily Head and Shoulder pattern got triggered due to the gap down last week. On Monday, May 7, we had a nice retest of the neckline, which acted as resistance and led to a sharp price drop. The market took out the low of January 23 (stop fishing) and so far respected the support zone (analysed in EUR/USD Market Analysis (14.05.12)).
Below the market is the weekly trend line (low of June 2010 and January 2012) which could act as support. The classical target of the Head and Shoulder is the length of the head (A-B) projected from the neckline break (1.3061) at about 1.2551, which would also clear out the striking low from January at 1.2624.
However, it is to early to make these assumptions and further price action will give hints of what to expect.