The Euro has initially tried to rally during the trading session on Tuesday but gave up the gains near the 1.22 handle. That is an area that has offered resistance more than once, and at this point in time if we were to break down below the bottom of the candlestick, then we could go looking towards the 50 day EMA. After that, the 1.20 level would be the next target. In general, we are talking about a market that is in a much bigger consolidation area, so even with the shooting star trying to form, I only put so much faith into it. Furthermore, if you look at this most recent action, you could make out a little bit of an “inverted head and shoulders.”
EUR/USD Video 24.02.21
If we were to break above the top of the shooting star, then it is likely that we go looking towards the 1.23 handle above. That is an area that begins massive resistance extending all the way to the 1.25 handle. Because of this, the market is likely to continue to be very noisy and stay within the bigger 300 point consolidation. However, the inverted head and shoulders suggests that we could go a little higher than the last rally towards the 1.23 handle, but still not enough to break out. I think this makes quite a bit of sense considering that the European Union is still having to deal with “rolling lockdowns”, and at the same time we have the Americans getting ready to do massive stimulus. In other words, we have the perfect recipe for a lot of “push/pull” trading.
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