Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

EUR/USD Signal: Head and Shoulders Forms on the 1D Chart

Bearish with head and shoulders pattern on 1D chart. Sell target at 1.0695, buy at 1.0900. Focus on upcoming Fed minutes and European data.

Bearish view

  • Sell the EUR/USD pair and set a take-profit at 1.0695.
  • Add a stop-loss at 1.0850.
  • Timeline: 1-2 days.

Bullish view

  • Set a buy-stop at 1.0800 and a take-profit at 1.0900.
  • Add a stop-loss at 1.0695.

EUR/USD Signal Today - 20/02: Bearish Head & Shoulders (Graph)

The EUR/USD exchange rate moved sideways on Monday as the US markets remained shut for the celebration of George Washington’s birthday. The pair was trading at 1.0775 on Tuesday morning, a few points above last Friday’s low of 1.0697.

European economy is slowing

The EUR/USD pair has remained under pressure in the past few weeks as concerns about the European economy. Data published last week revealed that the German GDP contracted in the fourth quarter even as it became the third-biggest economy in the world.

In a statement on Monday, the head of Bundesbank said that the contraction will continue this quarter. He attributed this slowdown to the recent transport strikes, weak consumer and industrial demand, and government policies.

Germany is not the only troubled European economy. In France, the government announced that it would slash about 10 billion euros out of its budget. The government noted that the weak economic growth made its fiscal plans untenable. Economists expect that the French economy will expand by 1% this year.

Top Forex Brokers

    This performance has made many analysts to predict that the European Central Bank (ECB) will move to cut rates earlier than the Federal Reserve. Besides, recent data showed that the American economy is doing better than its global peers.

    The economy expanded by 3.3% in the fourth quarter and this growth may continue this year. Also, the unemployment rate remains at a low level of 3.7% while inflation has jumped to 3.1%. As such, the Fed may not be in a hurry to cut rates.

    There will be no economic data from the US and Europe. Therefore, traders will focus on the upcoming minutes by the Federal Reserve. These minutes will provide more color about the last meeting and what to expect later this year.

    EUR/USD forecast

    The EUR/USD pair has been in a bearish trend after peaking at 1.1100 in January. It has made a series of lower lows and lower highs. Most recently, the 50-day and 25-day moving averages have made a bearish crossover, a popular bearish sign.

    Also, the pair has formed a head and shoulders pattern. It is now hovering near the lower side of this pattern. Therefore, the EUR/USD pair will likely have a bearish breakout in the coming days. This view will be validated when the pair drops below the key support at 1.0697, its lowest swing last week.

    Ready to trade our free daily Forex trading signals? We’ve shortlisted the best Forex trading brokers in the industry for you. 

    Crispus Nyaga
    About Crispus Nyaga
    Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

    Most Visited Forex Broker Reviews