EUR/USD Technical Analysis: Head and Shoulders Top in Place?
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- EUR/USD Technical Strategy: Short at 1.1849
- Euro may have completed a bearish Head and Shoulders chart formation
- Break of near-term chart support hints at decline below 1.18 mark ahead
The Euro is back on the defensive against the US Dollar as expected, with prices seemingly poised to probe below the 1.18 figure after a break of range support. Overall positioning hints a Head and Shoulders top may be in place, implying an eventual downside objective below 1.1650.
From here, a daily close below the 38.2% Fibonacci retracement at 1.1721 opens the door for a challenge of the 50% level at 1.1606. Alternatively, a move back above the 23.6% Fib at 1.1863 – now acting as resistance – sees the next major upside barrier marked by the August 29 high at 1.2070.
Risk/reward parameters appeared acceptable to attempt a short position and EUR/USD was sold at 1.1849, initially targeting 1.1721. A stop-loss will be activated on a daily close above 1.1894. Profit on half of the position will be booked and stop moved to breakeven when (and if) the first objective is met.
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