There is a 300-pip space below for EURUSD
There is a a big 300-pip space below the current EURUSD price pattern until the next most-looked-for potential support. This might or might not happen but could be really rewarding for EURUSD shorts if it does.
This is a weekly line chart of EURUSD. A line chart like this ignores the noise and price spikes that we often see in candlesticks and bar charts. The line in this weekly line chart is based on closing price at the end of the week. Consider that the final outcome between bull and bear fight.
There are two major features in this chart:
- Previous resistance from mid-2015 to mid-2016 was consistently around 1.145 (lower horizontal line) by end of week although spike highs were 1.16 and 1.17.
- There is a potential Head and Shoulders bearish reversal pattern forming right now and it's neckline is around 1.174 (upper horizontal line).
Between these two horizontal lines there is an empty space that is just a little bit short of 300 pips high. There are no price features here. This space was formed by EURUSD's very strong last quarter rally.
Since 1.145 is a very significant level due to the duration price got resisted here as well as the number of turning points at this level, this is a level that the market might be watching out most or most willing to commit to.
There is a possibility that if EURUSD were to break below the current Head and Shoulders neckline, there would not be any meaningful support until 1.145.
---> There is no way to tell in advance whether this statement is accurate.
---> If this statement is accurate, that 300 pip space would be very rewarding to EURUSD bears.