HEAD AND SHOULDER BREAKDOWN CUM BEARISH CHANNEL ON WEEKLY TF
EURUSD is trading in a bearish channel within a Head and Shoulder pattern with the pair rebounding around the lower boundary of the bearish channel around 1.0900/21 forming a support base.
The rebound however encountered a supply zone area between 1.106 and 1.109 where sellers brought the pair down where it produces a bearish pin bar on the daily chart on thursday close. On friday the pair also closed in red producing an inside day bar on the daily chart.
Current resistance stands at 1.106 and as far as price trades below 1.106 on daily closing basis we believe the pair could trade to the lower band of the weekly bearish channel again around the 1.097 area.
On the other hand caution has to be taken as the pair is rebounding and for the rebound to continue we need to see a daily close above the 1.106 and possibly also close above the previous week high around 1.11 area for the pair to gather traction to the upper band of the channel..
ACTION: we are short the EURUSD targeting 1.097
The rebound however encountered a supply zone area between 1.106 and 1.109 where sellers brought the pair down where it produces a bearish pin bar on the daily chart on thursday close. On friday the pair also closed in red producing an inside day bar on the daily chart.
Current resistance stands at 1.106 and as far as price trades below 1.106 on daily closing basis we believe the pair could trade to the lower band of the weekly bearish channel again around the 1.097 area.
On the other hand caution has to be taken as the pair is rebounding and for the rebound to continue we need to see a daily close above the 1.106 and possibly also close above the previous week high around 1.11 area for the pair to gather traction to the upper band of the channel..
ACTION: we are short the EURUSD targeting 1.097
Trade closed: target reached:
target achieved