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The EURUSD is approaching very important levels and forming important patterns, which could set the trend for the long term.
On the weekly chart, the EURUSD stays below the 200 day moving average and as we can see clearly, has finished forming a head and shoulders pattern, very important to help us analyze the trend in the long term for this pair. EURUSD has two levels of vital importance: the resistance level at 1.3159 and support at the level of 1.2719. If the EURUSD does a breakout of 1.3159 level, one would expect to be invalidated the formation of the head and shoulders pattern and ascend to the 200 day moving average near the 1.3471 level. On the other hand and is most likely, if the EURUSD does a breakout of support at 1.2719 level is expected to fall to 1.2081 level.
Our bearish outlook is based mainly on the head and shoulders pattern and the MACD indicator, which is in negative territory with great potential yet to go down. The news in the eurozone still not good and this has caused hesitation among investors, but the sellers are winning this battle and it is likely that the EURUSD drop to this support at the 1.2081 level, something I see very possible, but we must always be alert to the economic data are published in the eurozone and in the United States, which has great influence on this pair.
