Past Performance is not an indicator of future results.
The weekly EURUSD is examined on several levels:
1. Head and shoulders top (blue rectangles). The positively sloped aqua line shows the pattern's neckline. The vertical aqua line derives the pattern's target following its breakout. The target is 1.1134 and is academic - it may or may not be achieved. However, it does give the sense of bearishness associated with breakdown.
2. Price action shows a series of lower peaks followed by lower troughs. Thus, there is a defined downtrend. Moreover, the momentum of the trend is represented by the orange downsloping trendline.
3. The stochastic is maintaining its lower quintile reading (red rectangle). The longer the stochastic stays at these levels, the more downside pressure is applied to the EURUSD pair.
Eurozone inflation is at risk of breaching ECB target levels. However, the ECB has not tightened in policy yet. As such, the single currency has devalued. This, in itself, is inflationary i.e. the Eurozone will import higher levels of inflation as its currency weakens.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.