Since beginning of the year EURUSD is in an upward trend. The lowest rate this year pair reached on January 3rd was 1.0340. Since then, we have seen increases that reached last week handle 1.1910 which gave 1570 pips. The last weekly candle has shape of a pinbar with a fairly large upper shade which may announce a downward correction.
Looking on chart H4 we can observe the first signs of weakening of demand on this pair, the bearish candles are clearly larger than the bullish ones. Perhaps a Head and Shoulders formation is formed where the right shoulder was established today at night on level 1.1775 (green line) and the hypothetical neck line ( pink ) at 1.1710. It is difficult at this time to predict whether the formation of H&S will be completed so it is worth looking at the behavior of price at the mentioned (pink) level and wait for closure of daily and weekly candles before taking a trading position. If the formation of the H&S becomes a fact – looking from the technical side, falls can have range of 200 pips equal to height of this formation. (Our last analysis was not bad- until now Kiwi made some 140 p due to bearish H&S , maybe we will have similar situation to recently described here : http://www.forextradingforprofit.com.au/price-action-patterns/nzdusd-head-shoulders-pattern-160p-declines-coming ? )
However, on the way of declines pair have an obstacle – a strong support level of 1.1614 based on the peak of 3 May this year where on 26 July EURUSD strongly rebounded and reached this years high 1,1910.