Technical outlook for 2017: EURUSD faces more negative pressure

By studying the long term chart of the EURUSD pair, we notice that the pair is facing strong negative pressure affected by the completion of the head and shoulders’ pattern that appears on the weekly chart, and after sideways fluctuation all along the year, the price resumes its bearish track to start pushing on the critical support 1.0326.

The mentioned level represents 76.4% Fibonacci correction for the entire rise measured from 0.8562 to 1.6039, thus, breaking it will push the price to continue trading inside the long term bearish channel that appears on image, and the next target is located at 0.9600, it might be followed by some bullish rebound to retest 1.0326 level before turning back to resume the negative trading again.

Anyway, it is important to note that the full targets of the above mentioned head and shoulders’ pattern extend to reach 0.8562 recorded low, which the pair started its bullish trend journey that led the price to the historical top.

On the daily time frame, we find that the price attacked the sideways range support that dominated trading since the beginning of 2015, to add more confirmation to the continuation of the decline in the upcoming periods.

By studying the shorter time frames, we fill find that there is a bearish track that organizes the trading since the end of the last quarter of 2016, and according to the trading rules inside the channels, the way is open to target the mentioned channel’s support located now at 1.0150, noting that stochastic loss to its positive momentum reinforces the decline expectations.

Therefore, and according to the above mentioned factors, we suggest the continuation of the negative pressure domination on the pair’s trading in the upcoming weeks and months, noting that the negative targets start at 1.0120 and extend to go further towards 0.9600, noting that breaching 1.0660 might push the price for short term recovery attempts that its main targets reach to 1.1418 before any new attempt to decline, taking into consideration that holding below the last level represents the most important condition to continue the suggested negative scenario.