Today I would like to share with you some moves I see in the currencies markets for the Euro in the coming weeks. I have included my chart analysis. I hope you enjoy this post and find it useful!

EURUSD

After a long-term downtrend, this pair traded in a protracted trading range for two and a half years (!), before breaking out to the upside last summer. This now appears to be a rectangular bottom, marking the end of the bear market for EURUSD and the start of a new bull market. This can be seen in the weekly chart below:

However, the initial move out of the rectangular bottom has run out of momentum in the past few months. Below is the daily chart:

We can see the formation of a clear head and shoulder top. While I do not think that this pattern is strong enough to overcome the massive rectangular bottom (the size of a pattern, the length of time it takes to form, give it a greater significance, and hence a greater effect on the minds of traders and therefore future prices), we may well now see a retracement of this uptrend, perhaps to the top of the prior trading range. I would then expect prices to continue to rise.

EURGBP

This pair has been in an uptrend for some time now. A head and shoulders pattern was formed over the second half of 2016 and the start of 2017, but failed to penetrate the neckline, which is required to confirm the pattern, when Macron was elected in France. Since then, prices have continued to rise, supported by a long-term uptrend line. However, prices failed at the previous high (which is also a high from a few years before). This makes that price a more significant level, and we may now be forming a double top. Again, this would not be confirmed until we break through the neckline.

 
On the daily chart below, we can see the formation of a smaller double top in the recent price action, in the form of two, strong reversals in the past couple of weeks:

There is still the ascending support line to contend with in the near future, but this pair is looking very heavy, and the time may to break through this support line may be fast approaching.

Next week, we have the ECB and the week after the BOE rate announcements. These have the potential to affect prices, especially the BOE as they are expected to raise rates in the UK for the first time in many years. I will pay attention to the price action before and after these meetings and manage my trades based on that.

What do you think?

Thanks for reading, any feedback is much appreciated. If you liked my post don't forget to upvote and resteem ;)

Follow me for more trade ideas and other articles about trading!