EUR/USD Breaks Down Below Neckline of Head and Shoulders Bottom Pattern

Frankfurt (Mar 30)  EUR/USD is lower in today’s trading, following through on the weakness experienced Tuesday and Wednesday. The pair is currently trading at 1.0735, a loss of 0.27% from Wednesday’s North American close.

As a result of the downside price action, EUR/USD has broken down below the neckline of the head and shoulders bottom that was recently confirmed, thereby invalidating the pattern and its upside target. At present, support at the low from March 20th is being tested.

A decline below this level would leave the next downside target at the mid-point of March 15th’s long green candle at roughly the 1.0667 area, which corresponds to the highs established in mid-February.

On the upside, resistance is being found near the 1.0900 level. This level was tested and held on Monday.

In today’s economic news, Eurozone consumer confidence rose to -5.0 for March from -6.2 in February and close to two-year highs recorded in January. The index remains well above the long-term average of -12.

In the US, GDP, third estimate for Q4 is due at 08:30 ET, along with weekly jobless claims. The reading on GDP is expected at 2.0% versus a prior read at 1.9%.

Source: EconomicCalendar