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EURUSD, a make or break case

Tuesday, July 13, 2021 9:58 AM GMT

500 pips. That’s how much EURUSD has fallen in the last two months.
It is undeniably a huge drop. A drop with rotation swings of no more than 120 pips. That constitutes the move as a really sharp one and it indicates a possible shift in the mid-term spectrum of the pair.Bulls have been unable to control this move and everything shows that we are going to see a continuation, or maybe not…

Last week, EURUSD made a reaction on the zone of 1.178-1.179.
This reaction was enough to bring the price 100 pips up to the resistance of 1.188.
The retracement that is being performed today, is starting to form a very well known pattern.

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More specifically in the four Hour timeframe, an inverse head and shoulders are starting to form.
This has been many times the trigger for big reversals, especially when happening in bigger timeframes.
If it is combined with the big divergence of the MACD then the pattern is starting to get stronger. This could give a reaction of another 100 pips, provided that the neckline(1.188) of the formation would break successfully.



A similar situation is also visible from the daily timeframe.
The parallel lines show the potential resistances and targets.
Alongside the 200 EMA which is on the same area of 1.198-1.199, it makes this spot more and more the potential target.

However, this indeed is a make or break situation. Because if the pair fails to break the resistance of 1.188 then a continuation is most imminent with the previous lows of 1.178 to be the first main target of the bears.

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Whichever is going to be the outcome, investors should be aware of the sharp moves in the forex market as the summer might be here, but volatility has not eased down yet.

 

Disclaimer

The views expressed do not constitute investment or any other advice/recommendation/
suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of ZuluTrade Social Trading Platform and do not constitute an offer or invitation to anyone to invest or trade. Every metric and the statistical number is a result of a past performance, which does not constitute a promise or a certainty for a future one.

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