Bank of America Global Research economists analyze the technical outlook for the EURUSD. In his opinion, a drop towards parity followed by a bounce towards 1.0350/75 would confirm a head and shoulders pattern top.
The new highs in the RSI are a favorable condition for the formation of a bottom pattern
“A bottoming technical pattern would go a long way to support the possibility of EURUSD further rising next year. A pattern to watch is a head and shoulders bottom. Assuming the neckline of the pattern is 1.0350, then the left shoulder and head of the pattern have already formed. While below this, the right shoulder can begin to form.”
“A drop near parity (next few weeks) and then a recovery above the proposed neckline at 1.0350/1.0375 would confirm a head and shoulders bottom. Bullish moves in the pattern would imply a reversal of most of the decline from 2021-22, such as 1.0750, 1.0935/1.10 and possibly 1.12. The new highs in the Relative Strength Index (RSI) are a favorable condition for a bottom pattern to form.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
