10 Jul 2013
EUR/USD, focus shifted for a H&S target of 1.1790 - FXCharts
FXstreet.com (Barcelona) - The EUR/USD looks poised to embark upon a multi-month bearish cycle, especially after the break of the neckline of what Jim Langlands, Founder at FXCharts in Australia, expects to be an important head and shoulders.
While Langlands does not rule out the possibility of further erratic moves on northern hemisphere vacation, which may lead to some short-term bounces in the EUR/USD, the Analyst is skeptical to see the EUR/USD back above 1.3000 in the near future. However, once market are back in normal conditions, Langlands expects, eventually, a head and shoulder target of around 1.1790.
"If the trade idea materializes, it will of course take weeks, if not months to play out, so don't get too excited, but it looks as though we are in for some sustained dollar strength in the months ahead" Langlands said.
Technically, Langlands notes that "progress is now needed beyond the 4th April low at 1.2744 in order to head towards support at 1.2680 (61.8% of 1.2042/1.3710) which should be strong, with further bids likely to be seen at 1.2660 (13 Nov low)." Once this hurdle is out of the way, "a real acceleration could begin as we head to 1.2586 (Aug 2010 low) and then 1.2435 (76.4% of 1.2042/1.3710)" Langlands added. Further out, the July 2012 low at 1.2042 and the June 2010 low at 1.1876 come into focus.
While Langlands does not rule out the possibility of further erratic moves on northern hemisphere vacation, which may lead to some short-term bounces in the EUR/USD, the Analyst is skeptical to see the EUR/USD back above 1.3000 in the near future. However, once market are back in normal conditions, Langlands expects, eventually, a head and shoulder target of around 1.1790.
"If the trade idea materializes, it will of course take weeks, if not months to play out, so don't get too excited, but it looks as though we are in for some sustained dollar strength in the months ahead" Langlands said.
Technically, Langlands notes that "progress is now needed beyond the 4th April low at 1.2744 in order to head towards support at 1.2680 (61.8% of 1.2042/1.3710) which should be strong, with further bids likely to be seen at 1.2660 (13 Nov low)." Once this hurdle is out of the way, "a real acceleration could begin as we head to 1.2586 (Aug 2010 low) and then 1.2435 (76.4% of 1.2042/1.3710)" Langlands added. Further out, the July 2012 low at 1.2042 and the June 2010 low at 1.1876 come into focus.