The break early this year of 1.2875 - low recorded back on 10th January 2011 - is just confirming things should get worse for the EUR/USD in 2012. The head and shoulders pattern that took place in 2011 calls for much lower prices in 2012.
First â€ślogical targetâ€ť is set at 1.1880, previous Dow Theory pivot point made back in June 2010. A break below this level can open basically the parity mark, but this is another story at this stage. Resistance set at 1.3240/60 will be now very tough to break â€“ thus, price tend to retest the head and shoulders neckline before continuing its course (not a must, a possibility). First support is set at 1.2580 and should be the next meeting point for the bears and the bulls. 1.30 remains the first serious psychological resistance barrier.
A head & shoulders pattern is in place, with its neckline acting as resistance (1.3250). This bearish patterns calls for a target of 1.1270 â€“ the head equals the distance from 1.4940 to 1.3000 and the neckline was broken at 1.3210. Subtracting the 1940 pips from 1.3210, targets roughly below 1.13. Only a move above previous Dow Pivot level will cancel this scenario â€“ in other words 1.4270. Sell rallies is favored, with the region of 1.3250 being now the first barrier bulls shall conquer to pressure
Monthly FREE: Forex Newsletter, Special Reports, Webinars.
Take a moment and check out what our sponsors
have to offer by clicking on their ads.