EUR/USD – The Euro is Running out of Steam

Points to consider in this Forex market:

• EUR/USD is trying to form a possible Head and Shoulders (H&S) chart pattern as a top could be in place.
• We are waiting on confirmation of this H&S with a daily close below the neckline support.
• Trade strategy: Stand aside

The EUR/USD Forex market looks to be carving out a top near the 1.10 pivot. The rebound that happened after the last European Central Bank (ECB) policy meeting is running out of steam. T Right now, prices are trying to form a bearish Head and Shoulders chart pattern. We still need confirmation with a daily close below the neckline support.

Technical Analysis

Let’s take a look at today’s EUR/USD daily technical analysis. We need daily close below a cluster zone that runs from the neckline support, this is also the May 27 low price point. This area is at 1.0778 to 1.0817. If this happens we will challenge the next technical support barrier lining up at 1.06/1.0601. The alternative EUR/USD technical analysis, should the euro recover and support this Forex market, notes technical resistance at the December 15 high. This technical barrier is at 1.1060. A break above this barrier challenges the next technical resistance level at 1.1174. This is also the falling trend line resistance for today.

Trade Strategy

Let’s now get into today’s daily EUR/USD trade strategy. While we have a possible Head and Shoulders chart formation trying to form, there is no actionable trade at this time. We need to see a break below the neck line support before considering a short euro trade. Also, from a risk to reward standpoint, price action is too close to a technical support level. This indicates a short EUR trade is premature. For now, I will stand aside and monitor my charts for a more actionable trade to come along. For today, I am flat in the EUR/USD Forex market.