Head and Shoulders Fails to Deliver on EUR/USD

In today’s technical analysis, let’s take a look at EUR/USD, where the situation is getting interesting.

We have a classic bearish formation here, a head and shoulders pattern marked with blue lines. Normally, this setup suggests further downside, especially after a break of the neckline.

But in this case, the market is not following the textbook scenario.

Instead of accelerating lower, the price is holding firmly above a key horizontal support marked in yellow. Buyers are clearly stepping in at this level and preventing further decline.

This kind of behavior often signals weakness in the bearish setup.

So how to approach it?

If the price manages to close a day above the neckline of the head and shoulders, that would effectively turn this into a false breakout. And false breakouts from such patterns are strong signals in the opposite direction.

In this case, that would mean a proper long-term signal to buy.

For now, the market is at a decision point. But with buyers defending support so well, the chances for a bullish reversal are definitely increasing.

Source: https://www.axiory.com/analytics/technical-analysis/head-and-shoulders-fails-to-deliver-on-eur-usd