EUR/USD Breaks to the Downside; “It may get really

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The US dollar moved significantly higher in recent sessions, as Risk trade fell sharply, driven by fears over the euro zone crisis! It was the worst day in six weeks for the US stocks market which lost more than 3%. It was also one of the worst days for Eur/Usd pair which lost more than 300 pips from its daily highs, and found the recent support just above 1.3500.

Well, this appears to be just a temporary low for the pair, because based on the 4h chart we can see that downtrend has just started, if we consider a broken neckline of a head and shoulders pattern that we paid attention for some time.

Guest post by Gregor Horvat

Well, if we do just simple measurement from the head to the neckline and then from the breakout point, we can see that projected target for the pair comes even below 1.3.

We also need to be aware that broken support, like neckline in our case, usually becomes resistance, so watch for sell-offs after any pull-backs.  Of course, its never easy to call a target like that, but that’s it what market is telling us right now. So the concept is very simple here, pair is bearish as long the price trades below 1.3860!

If you want more detailed technical analysis regarding the USD strength which was expected from technical point of view, please review the video below.

EUR USD Technical Analysis Elliott Wave November 10 2011

Video Analysis:

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About Author

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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