My Life My Trade

Here is the daily chart of EUR/USD which I have posted over past couple of weeks in my other currency updates. One can see that the 1.3750-1.3800 is a very key region. It acted as resistance on number of occasions and now is serving as the neckline for the head-and-shoulders pattern that has been completed over past 3 weeks. In the chart below, one will see that once this level gets breached, EUR/USD should get to 1.3600 in a hurry (as the move up was a quick one too).

Coming back to the chart above, once 1.3750 is broken successfully, there are two downside target possibilities (both of which I have discussed numerous times).

• The steep upsloping trend line that has supported EUR/USD during this rally from March lows. The red lines (extended into future) show that EUR/USD will intersect that line at around 1.3500, which is also a key level. EUR/USD launched an impulsive move up from that level. Going down to 1.3500 should coincide with SPX 875-880 level.
• The other possibility is a much more steep decline, right down to the gently upsloping trend line at the bottom of the chart. I do not see this happening anytime soon. If it does happen, it would bring SPX down to 750-790 levels. Such a huge retracement is not on the cards yet.. at least not in the next week or two.

As always, if you got something out of this post, some love shared will be greatly appreciated. Thanks and good night.