Potential head and shoulder top on EURUSD

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.

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