Short-term technical break down in EURUSD

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EURUSD has formed a Head and Shoulders pattern as we explained in previous posts. However price got rejected at the neckline resistance and is turning lower breaking below key short-term support after the announcement of the weekly US jobless claims.

As can be seen in the 1 hour chart above, price got rejected at the horizontal black neckline resistance. After the rejection price came down strongly and broke below the black upward sloping trend line. Staying below this upward sloping trend line will be a bearish sign. Horizontal support is at 1.0815. Resistance remains key at 1.0890-1.09. Bulls will control the trend only on a break above 1.0890. The worse than expected number of US jobless claims announced today brought increased volatility in the markets and so far it seems to favor the Dollar. If price breaks below 1.0830-1.0815 we should expect a swift move to 1.07. On the other hand a move back towards 1.09 will increase the chances of breaking above the neckline and will also increase the chances of moving towards 1.1050.The material has been provided by InstaForex Company – www.instaforex.com