EUR/USD Could Face More Down Side.

In spite of negative news coming from Greece almost daily, the Euro managed to stage a good size rally recently. In relation to the US Dollar, the common currency appreciated about 700 pips, from the low of 1.4000 to the latest high of around 1.4700. It appears, though, that this advance in a corrective mode. Earlier this week the EUR/USD started to form a Head and Shoulders pattern, indicating possible reversal. The lows between the Shoulders created a support at 1.4560, which had to be broken in order to confirm the formation. That happened on Thursday, following the ECB rate announcement. The EUR/USD dropped sharply, crushing through the support, before making a low for the day at 1.4477. At present, the price is moving sideways, consolidating before the next move. While this reversal pattern, the Head and Shoulders, formed on a short term chart, hourly, this sell off can easily extend further down because big time fundamental news, like the ECB announcement, have tendencies to keep moving markets for some time. If the new support at 1.4477 is broken, the EUR/USD could move much lower – the next support is at 1.4306. To read more click