A shooting star top on the weekly chart and a potential shooting star on the monthly chart look ominously bearish for the Euro, according to Walter Zimmermann, Senior Technical Analyst at United-ICAP.
Zimmermann combines cycles analysis, trendlines, Elliott Wave and candlesticks to come to the conclusion that its “looking ugly bearish” for the Euro. Specifically the 4 year cycle low is due in Q4 of 2016 and the 8 year cycle low is due late 2017, and “without a sustained break out above 1.1800 the downside target is still the 0.8800 area,” (see Monthly Chart). Zimmermann also notes that a bearish shooting star top is unfolding on the current monthly candlestick.
In the more medium-term and looking at the Weekly Chart, Zimmermann also notes the presence of a shooting star top marking the 1.1714 high and, together with last week’s long red body, he says this is an extremely bearish development. However, Zimmermann says a confirmed breakdown has yet to occur and this would require a decisive weekly close below 1.0645.