Potential head and shoulder top on EURUSD


The above chart shows weekly price action. There is a potential head and shoulder top on the EURUSD. The right shoulder still needs to form and price needs to break through the neckline. If it is a valid head and shoulders top, the target is very close to parity.

The lower pane shows the DMI, which is a trend following indicator i.e. it works well in trending (and not ranging) markets. However, it is sending a warning: the red -DI line has crossed over the blue +DI. This is a bearish cross. If these two lines start showing angle and separation and the black ADX line starts moving up, we may very well see the head and shoulder pattern complete and meet target.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.