After neckline breakthrough the “head and shoulders” figure has been completed. In March 26th post “Possible EURUSD head and shoulders formation“ target set was 1.2690 which after several updates has been lowered to 1.2620. Although not exactly reached as recent the EURUSD bottom touched 1.2635 (vs. 1.2620 expected), the accuracy of this analysis tool was high – 15 pips.
|EURUSD target reached|
What to expect next? The level 1.2620 is strong support and consolidation around this level is possible. However if the situation in Europe quickly deteriorates breakthrough under 1.2620 could dive the euro to June 2010 low at 1.2150. Possible Greek exit could let the euro to suffer even bigger losses. If Europe manage to avoid worst case scenario than quick rally to 1.30 is expected.
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