This Pattern Forecasts a 1,500 Pip Drop Ahead for the Euro

The Euro has been forming a Head and Shoulders chart pattern since 2010. This suggests the euro zone’s currency peaked in 2008 and will continue to weaken.

Here’s a close-up…

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This year, the euro broke below the “neckline” of the pattern. It then bounced higher to re-test the neckline level (which is common for this pattern) before continuing its descent.

The Head and Shoulder pattern gives us a useful measuring tool. It suggests the euro could tumble as low as 1.1350 against the dollar (another 1,500 pips lower). That’s a full 30% drop in value from the height of the euro’s strength in 2008, when it took $1.60 to buy the euro.

Watch for our bullish U.S. dollar position to continue moving higher as the euro zone searches for a savior – socialist, technocrat or otherwise.

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Categories: Economy

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.