EUR/USD Price Analysis: Forms head-and-shoulders pattern

EUR/USD closed below the 50-day SMA on Wednesday.
The pair forms a head-and-shoulders bearish reversal pattern on the daily chart.

Omkar Godbole FXStreet Contributor

EUR/USD is trading near 1.2094, representing a 0.11% drop on the day.

The daily chart shows the pair has carved out a head-and-shoulders pattern with the neckline support at 1.2052. A close below that level would confirm a bearish reversal and open the doors to a 300-pip fall (target as per the measured move method).

A drop to the neckline support looks likely as the 14-day Relative Strength Index is flashing a bearish signal with a below-50 print. The pair closed under the 50-day Simple Moving Average (SMA) on Wednesday, the first violation of the key SMA since early November, signaling the path of least resistance is to the downside.

A close above 1.2190 (March 22 high) is needed to put the bulls back into the driver's seat.

Daily chart

Trend: Bearish

Technical levels

EUR/USD

Overview
Today last price	1.2094
Today Daily Change	-0.0010
Today Daily Change %	-0.11
Today daily open	1.2105

Trends
Daily SMA20	1.218
Daily SMA50	1.213
Daily SMA100	1.1952
Daily SMA200	1.1661

Levels
Previous Daily High	1.217
Previous Daily Low	1.2058
Previous Weekly High	1.219
Previous Weekly Low	1.2054
Previous Monthly High	1.231
Previous Monthly Low	1.1924
Daily Fibonacci 38.2%	1.2101
Daily Fibonacci 61.8%	1.2127
Daily Pivot Point S1	1.2052
Daily Pivot Point S2	1.1999
Daily Pivot Point S3	1.1941
Daily Pivot Point R1	1.2164
Daily Pivot Point R2	1.2223
Daily Pivot Point R3	1.2275

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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