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EURUSD: One to Watch Next Week

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On Monday we looked at a EURUSD pattern that reminded us to stay flexible.

It hints at a possible bullish reversal within a longer-term downtrend.

But I’ll repeat what I wrote Monday: this pattern requires a daily close above the 1.1430 area to confirm it.

The “daily close” refers to the New York 5 pm EST close. These charts are required for trading price action.

You can go here to get instant access to the same charts I use.

Until that happens, EURUSD will remain range bound.

And that’s an understatement. Just look at how indecisive the euro has been since that November 20th bearish engulfing day.

I’m not surprised though.

That session on the 20th of last month was right before the U.S. Thanksgiving holiday. It usually marks the start of the relatively slow year-end period that runs through December.

So you could say EURUSD is playing its part in this holiday lull exceptionally well.

But there’s something else that could be holding market participants back.

It’s no secret that next week is a big one for the Brexit saga. December 11th to be more precise.

And while we all know that Tuesday’s vote will affect the pound, the euro won’t escape the volatility. Not by a long shot.

That uncertainty is likely why EURUSD is struggling to make progress.

I wouldn’t be surprised to see this sideways movement continue right up to Tuesday’s Brexit vote.

However, despite the lack of conviction (so far) in this inverse head and shoulders pattern, I want to expand on Monday’s post.

I always like when measured objectives line up with key areas.

That’s true even if the pattern in question is still developing.

In the case of EURUSD, if buyers do confirm this reversal next week, the measured objective comes in near 1.1700.

For those who have followed me for a while, you’ll remember that 1.1730 was a key level of ours back in August and September.

It’s also the 38.2% Fibonacci of the year-to-date range. Of course, 1.1700 is not 1.1730, but it is close.

There’s another reason I like that 1.1700 area.

If we draw a descending channel using the August and November lows, you can see that resistance would come in around the 1.1700 handle.

That lines up with the 270-pip measured objective.

All of this is just something to keep an eye on next week.

There is no opportunity here in my opinion, at least not yet. I’m also not ready to turn bullish EURUSD. In fact, I’m still quite neutral as I was on Monday.

If buyers can clear that 1.1430 resistance area next week though, I have every reason to suspect a move to the 1.1700 area.

Just remember that it’s going to take a daily close (New York 5 pm EST) above it.

Alternatively, if sellers take out the November 28th low at 1.1267, it would likely negate the bullish potential and would re-expose 1.1215 support.

EURUSD remains a waiting game for now. Perhaps Tuesday’s session will provide us with some answers.

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EURUSD potential inverse head and shoulders pattern

Leave a Comment:

42 comments
Sumantra kumar halder says

Excellent analysis

Reply
    Justin Bennett says

    Thanks, Sumantra. Enjoy your weekend.

    Reply
Matt says

I enjoy reading your analysis every day, I am looking to 1.440 as resistance, for the C,D down move, could be a butterfly? Do you watch gartley and related patterns, by chance ? Thanks in advance

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    Justin Bennett says

    Hi Matt, thanks for the support. No, I don’t use Gartley.

    Reply
Diogo says

Thanks, I had the same analysis on my platform. Glad someone shares the same point of view as me 🙂

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    Justin Bennett says

    You’re welcome, Diogo. Next week should be interesting. Have a great weekend.

    Reply
ioannis says

excellent(and very helpfull) analysis

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    Justin Bennett says

    Thanks, Ioannis. Glad you found it helpful.

    Reply
Pierre Mifsud says

I have a feeling that EURO can reach the 1.253 handle. Observe the falling wedge on the weekly time frame which has been forming since Oct 2017 and its width at the bottom is approx 960 pips and add it to the existing currency value in progress

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    Justin Bennett says

    It’s possible.

    Reply
Mandla says

It sure is a waiting game, thanks again for the analysis.Have a super-b weekend

Reply
    Justin Bennett says

    You’re welcome. Thanks, same to you.

    Reply
William Beverly says

Justin, I downloaded and installed the Blueberry Trading Platform but I can not establish a demo trading account. Is it possible to overcome this problem??? If so, how?

William Beverly

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Ken says

Thx Justin, Love your analysis. Can I please ask how regularly and on which pairs do you provide this analysis/commentary for your members…?

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Zaahid Mahomed says

Thank u enjoyed it will wait n see

Reply
    Justin Bennett says

    You’re welcome. Thanks for commenting.

    Reply
adi says

you are really great as well as your work

Reply
    Justin Bennett says

    Thanks, Adi. I appreciate that. Enjoy your weekend.

    Reply
Adeoya Ebenezer says

I have been following your analysis for awhile it’s always superb. Thanks for the excellent price action analysis.

Reply
    Justin Bennett says

    You’re welcome. And thank you for the kind words. I certainly appreciate the support.

    Reply
nik says

Hi Justin. Great analysis as usual (been following you for about 3 months, I think) and thanks for sharing.
Less noise, more facts => great for understanding price actions.

Reply
    Justin Bennett says

    You’re welcome. Thanks for the support!

    Reply
nik says

Hi Justin – 1 question. Looking at a bigger picture here. EU on weekly chart – isn’t there another HnS pattern? If that is a valid HnS, and in cases like these, which one takes precedent – the inverted HnS on daily or the HnS on weekly?

Would like to hear your thoughts on this. TIA & cheers!

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    Justin Bennett says

    No, not in my opinion. A head and shoulders pattern should have a horizontal or ascending neckline, not a descending one.

    Reply
      nik says

      thanks Justin for that clarification

      Reply
Tarun says

Hi Justin Thanks for your analysis on this golden pair and I really like your fair comments on both north and southside since you are a professional trader. I would be really if you can add your probability percentages both in North and south sides as this will really help all readers who follow your analysis . Cheers !!!

Reply
    Justin Bennett says

    You’re welcome. It doesn’t quite work that way.

    Reply
Vosemen says

Hello Justin, great work here. I stumbled on your website last week.
Based on the insight from the daily charts on different currencies, using only the highs and lows at a glance. I was able to predict the market direction of five trade setups on the hourly time frame.
Guess what? They were all profitable.
With a little over a year in Forex trading. I’m impressed with the knowledge I have gotten so far.
Thanks for being a part of those contributing to my success.

Reply
    Justin Bennett says

    Thanks. Glad to hear about your progress. Well done.

    Reply
ghulam says

sir what ever graph style i use it takes bullish turn above 1430 but may not last target and falls back after a few 200 move i found its better to take profit when ever instead of waiting long term as what is happening now a days thanks

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Steven Capoch says

Analysis on point.

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    Justin Bennett says

    Cheers, Steven.

    Reply
Uzoma Nnamdi says

Thanks

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Kenny Jay says

Hi , I think you should post which currency alreay open signal Buy/Sell . So it might help people who can check easily . Not by click each post you update .

Reply
    Justin Bennett says

    This isn’t a signal service, nor will it ever be one.

    Reply
Zakirussen Mussajibai says

Hi Justin Bennett,
You are a technical trader. Many traders say that technical analysis is bullshit because Market Makers have their own pattern. Often they let it win retailers but very often they stop-hunt retailers. Your view please.

Reply
    Justin Bennett says

    And some technical traders make similar comments about fundamental traders. Round and round we go.

    The bottom line is you have to find what works best for you. End of story.

    Reply
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