Inverted head and shoulders on Euro US-Dollar daily chart. Xstation

By Raffaele Del Gatto

The Euro-Dollar pair (EUR/USD) is testing a critical level, as prices have being rejected by a resistance placed at 1,2085. This resistance is also the neckline of an Inverse head and shoulders, that we’ve drawn on the daily chart above. The chart pattern usually suggests a breakup followed by an uptrend continuation, however the breakup may be preceded by a pullback on November high, around 1,197.

The breakup would launch the EUR/USD pair toward 1,22 and then 1,25. The Euro is strengthening against the US dollar (and sterling) since Trump election (and Brexit forum), when the single currency was around 1,040 and some investors speculated on EUR/USD parity. A strong euro may create a dilemma for the European Central Bank, which is expect to wind down the quantitative easing programme this year if the euro zone continues to grow strongly.

Investors will focus their attention on next Italian general election, which will be held on 4 March. Italians will go to the polls to vote the next Prime Minister, and the result may introduce new uncertainty in Europe.



Former HR manager and World Editor of International Business Times Italy (Newsweek media group). Now CEO and Founder of The Business Globalist and Jobs Into Media.

Raffaele Del Gatto is a geek person obsessed by innovation, interested in geopolitics, economics and management, passionate about trading and video games.