DXY, EUR/GBP, EUR/USD: H&S Patterns Underway: Levels & Targets

DXY, EUR/GBP, EUR/USD: H&S Patterns Underway: Levels & Targets

On February 7, 2017, Posted by , In Uncategorized, By , , With No Comments

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DXY breaks neckline and begins oversold bounce.

• Price action ending January broke down below technical support and the neckline of a head and shoulders top at the round number of 100.

• There is technical risk of a larger retracement to the 200d moving average support at about 98.

• Provided the DXY remains below the right shoulder highs and 50d moving average of 101-101.50, this technical top pattern remains influential and bearish in the near term.

EUR/GBP forming right shoulder

• EUR/GBP began rolling over from a lower high starting in February. This may be the right shoulder of a head and shoulders top.

• Strong support at .83300 from the neckline, trend line and 50d moving average must be broken to confirm the top.

A break below support suggests EUR/GBP will fall to about .78500.

EUR/USD attempts to confirm H&S bottom

Spot EUR/USD is attempting to break the neckline at 1.08 to form a head and shoulders bottom.

• A close through 1.08 is bullish and points up to the declining 200d at about 1.10, 1.1080 and possibly 1.1255. The 50d sma should catch up to offer support.

• A drawback to this pattern is the lack of bullish (overbought) momentum in the rally from the 1.03’s double bottom. The next rally should produce an overbought trend to increase conviction.

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