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EURUSD: Bearish Reversal Underway With a 1.1300 Target

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Yesterday’s session confirmed what we have suspected since early September – that the EURUSD was topping. It’s been a topic of discussion since the September 8 bearish pin bar from 1.2040 resistance.

Then came the combination of factors that suggested an imminent move lower. The September 25 close below ascending channel support sealed the deal and opened the door to 1.1670 support.

All of those scenarios were merely a precursor to yesterday’s breakdown. I mentioned it last Friday and again in the most recent weekly forecast how sellers needed to secure a close below 1.1670 to open up downside targets.

But the more significant impact of yesterday’s sub 1.1670 close was the confirmation of a three-month head and shoulders pattern. The formation gives me a reason to believe the pair is heading toward 1.1300 and perhaps even lower.

In fact, 1.1300 was my initial target for the pair when I went short on September 8. I mentioned this in the member’s area, though I ended up booking profit at 1.1670 and re-entered short just below 1.1875.

From a technical standpoint, no other currency pair comes close to matching the EURUSD right now. That’s saying a lot considering there’s no shortage of attractive charts for me to choose from for this weekend’s forecast.

If you aren’t already short from the 1.1875 retest, you may want to hold off for now. The pair is quite overextended at the moment so there’s a decent chance we’ll see a rotation higher into 1.1670 resistance next week.

The next key support comes in at 1.1490. And if the price action throughout 2017 is any hint, we could very well see a bounce from this area back to 1.1670. Of course, there’s always the chance that U.S. dollar bulls don’t stop for a breather until 1.1300.

Regardless of what occurs within the present range, as long as 1.1670 holds as resistance on a daily closing basis (5 pm EST), my target will remain 1.1300. If buyers manage to retake the 1.1670 handle, it would signal a false break and re-expose 1.1875 resistance.

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EURUSD head and shoulders pattern

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15 comments
Mo says

Hi Justin, do you open trades on Fridays?

Reply
    Justin Bennett says

    Not usually. I try to avoid it.

    Reply
Rizwan Sadiq says

Sir Can we put sell limit pending order at 1.1670 resistance.

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    Justin Bennett says

    What does your plan say to do in this situation? That question isn’t for me to answer.

    Reply
    Darius says

    I think today we can count as holded below resistance, day did not end yet, but not much left, few hours. So I think we can add sell limit and hope that it sells.

    Reply
TJ says

Hi Justin,

I’ve been following this one, with you, since a little while now. Very well done analysis. May I ask you, do you use mainly open your trade at market or do you also use limit order?

Reply
    Justin Bennett says

    I use both. It depends on the situation. If I’m in front of my computer and see an opportunity, I’ll enter at market. I did that less than 24 hours ago with a EURNZD short at 1.7030. No need to deliberate over a few pips when staring at a potential move of several hundred pips.

    Reply
      Rizwan Sadiq says

      Sir when you put entry then can you please post on your site . we will follow your entry,and this is very useful for all of us. thanks

      Reply
        Justin Bennett says

        I posted the EURNZD entry in the member’s area. I won’t announce entries on the free site unless it’s after the fact.

        Reply
          Rizwan Sadiq says

          How Can i Join member’s area?

          Reply
          Justin Bennett says

          All of the details are explained during the webinar here: https://dailypriceaction.com

          Reply
Rizwan Sadiq says

Some time i use limit order and some time i directly put buy/sell order.

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Mark says

I follow your analysis with great interest but actually I would ask if you trade for real and what type of results do you get just to have a guideline about the potential.

Reply
    Justin Bennett says

    Of course I trade. I even just mentioned a EURNZD short I took less than 24 hours ago (see comment above).

    My suggestion is to forget about the potential and focus on the process instead. Protect what you have and only take the most favorable setups.

    Reply
Ash says

PLiz do a daily fx trade setup for GBP.. . How interest rate decisions etc can affect this week.. Which we be long or short. thnx

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