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EUR/USD to Start the Week with a Completed Head and Shoulder

EUR/USD has been bullish in 2017, rallying from about 1.3650 to almost 1.21 by September. However, we are now seeing the USD strengthen across the board, and $EURUSD has started a bearish correction phase.

EUR/USD Daily Chart

(click to enlarge)

Head and Shoulders:
- The daily chart shows a market that has been bullish but has now completed a price top.
- Note that in the completed head and shoulders pattern, the "HEAD" is another H&S pattern. This "fractal nature of the pattern was another clue that the market is topping.
Pullback; Bullish Swing vs. Bearish Mode: 
- The overall trend in EUR/USD in unclear. 
- It has choppy and bearish since the Financial Crisis in 2007-2008.
- But it has been sideways since 2015. 
- 2017 was the year of a bullish breakout. And now there is a pending bearish swing.
- So, we are basically looking at a bullish breakout versus a prevailing bearish bias.
Fibonacci Retracement:
- Because the long-term trend is unclear, we might want to treat the current bearish correction relative to the 2017 swing.
- I think we should limit the bearish outlook to 1.10, the 61.8% retracement level.
- Note that this is also close to the middle of the broken consolidation range. 

EUR/USD Weekly Chart

(click to enlarge)