FxWirePro: EUR/USD forming head & shoulder pattern

The single currency has been consolidating below 1.2 against the dollar since the attempt to break the resistance level soured in September. The euro has kept its head high, focusing on the European Central Bank’s (ECB) monetary policy decision despite political trouble in the region. In the German election last month, incumbent Chancellor Angela Merkel won and on its way to become Germany’s longest-serving chancellor but her win margin depleted sharply and she is still struggling to form a governing coalition. On October 1st, in an independence referendum, the Spanish region of Catalonia voted in favour of independence sparking tensions with the federal government in Madrid. The bad news has just kept piling up, while the euro battles sellers around key resistance at 1.2 area.

To add to the trouble, the technical chart isn’t looking bright for the bulls. Price action (see chart) suggests that the pair (EUR/USD) is in the process of forming a head & shoulder pattern, which if completed would be very bearish for the single currency. We urge our readers to keep monitoring the pair closely.​

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