XEU Euro Weekly and Daily Charts H&S

All eyes are on the head and shoulders pattern (blue lines) on the daily chart; head at 137-ish, neck line at 132.50, so the target is the 127 support if the 132.50 fails. This would be in line with Keystone's 80/20 rule where 2's lead to 8's so a failure of 132 would lead to 128. The 200-day support is in that area as well.  The daily chart shows the negative divergence spank down from two weeks ago. The red rising wedge and overbot conditions also provided the bear clues and the cherry on top was the doji candlestick top indicating a trend change on tap. The red lines show more downside ahead after any bounce would occur. The green circles show many juicy gaps below that will need filled.

In the weekly time frame, a textbook bull flag played out; first leg from 121 to 132, a difference of 11, then the sideways consolidation flag as price leaks slightly lower, pure textbook move, then second leg begins at 127, thus, 127+11 is 137-138 target, which was achieved to satisfy the pattern. Last summer's low in the euro was created by the falling green wedge, oversold conditions and positive divergence. The 200-week MA at 135.32 is an important resistance level. The histogram and stochastics caused the spank down on the weekly chart three weeks ago but the RSI, MACD line and ROC want to see price come back up after a pull back. Projection would be a test of the 50-day MA at 132.80, and the neckline for the H&S at 132.50. If positive divergence occurs on the daily a bounce will occur, if not, a move to 129.50-131.0. The weekly chart wants to see price come back up so a recovery move is in store at some point over the coming days or week or two. Down euro = down equity markets. Up euro = up equity markets. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.