Unconfirmed Head and Shoulders on EURUSD

EURUSD remains in a downtrend on both the daily and weekly charts, but a bullish Head and Shoulders reversal pattern could come into play should the pattern be confirmed, according to Andy Dodd, Head of Technical Research at Louis Capital Markets.

Dodd says a confirmed break above the neckline would leave a medium-term target some way above current levels at 1.2516 and, with a short EUR having been a consensual trade for some time now, a sharp move higher is likely should the neckline fail. He says this means a stop/reverse on shorts is sensible on such a break. For the time being however the downtrend persists.

See chart.

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