A study of the daily time frame shows what could be the formation of a head and shoulders pattern. The left shoulder developed in early August while the head of the structure was carved out between August 29 and September 22.
Whether or not the pair forms the right shoulder is anyone’s guess. Furthermore, without a daily close below 1.1670, we can’t technically call it a head and shoulders pattern. Until that day comes, this isn’t much more than a talking point.
For now, I’m going to keep an eye on how price reacts to 1.1875. A bearish signal from current levels could take us back down to 1.1670 support and perhaps 1.1490.
Alternatively, a daily close (5 pm EST) above 1.1875 would (at minimum) delay the bearish scenario I just described. It would also expose the next key resistance at 1.2040.
Keep in mind that the FOMC meeting minutes are to be released today at 2 pm EST. Then on Thursday, we have PPI and U.S. unemployment claims at 8:30 am EST followed by Friday’s CPI and retail sales at the same time.
Source: bit.ly/2g11ZCy
Whether or not the pair forms the right shoulder is anyone’s guess. Furthermore, without a daily close below 1.1670, we can’t technically call it a head and shoulders pattern. Until that day comes, this isn’t much more than a talking point.
For now, I’m going to keep an eye on how price reacts to 1.1875. A bearish signal from current levels could take us back down to 1.1670 support and perhaps 1.1490.
Alternatively, a daily close (5 pm EST) above 1.1875 would (at minimum) delay the bearish scenario I just described. It would also expose the next key resistance at 1.2040.
Keep in mind that the FOMC meeting minutes are to be released today at 2 pm EST. Then on Thursday, we have PPI and U.S. unemployment claims at 8:30 am EST followed by Friday’s CPI and retail sales at the same time.
Source: bit.ly/2g11ZCy