Euro: Look at This Head & Shoulders Chart Formation
Learn about the "head and shoulders" measuring formula
by Bob Stokes
Updated: December 16, 2021
You are probably familiar with the classic "head and shoulders" chart pattern.
But, in case you need a refresher, here's a brief description of a head and shoulders top:
The high of an initial upward move is the left shoulder. After a decline, another upward move takes prices to a higher high, or the head. A second decline follows the head. A third rally then takes prices to a peak below the high of the head, and becomes the right shoulder. The left and right shoulders are often similar in duration and extent. A trendline connecting the two lows is called the neckline. When prices penetrate the neckline, a change of trend is believed to have occurred.
Head and shoulders bottoms also occur and the same description applies except in reverse.
This head and shoulders measuring formula -- showing a top as an example -- provides even more insight. The commentary is from a past issue of Elliott Wave International's Trader's Classroom:
To identify a high-probability price target for the move following the break of the Neckline, measure the distance between the Head and the Neckline and then project that distance down from the point at which the Right Shoulder breaks the Neckline.
Our July 2021 Global Market Perspective applied this knowledge to a forecast for the euro.
The chart on the left is from that July issue of the Global Market Perspective and the chart on the right was updated for our December Global Market Perspective. Here's what the December Global Market Perspective said:
A relentless four-month decline pulled the euro slightly below our downside target of $1.1263 on November 19, as these before-and-after charts show. On November 24, the euro bounced from its $1.1185 low...
Will the rally persist or is it about over?
You can get our forecast for the euro, in addition to more than 50 other financial markets in our Global Market Perspective.
Those "other markets" include major global stock indexes, cryptocurrencies, forex, rates, metals, energy and much more.
Just follow the link below to get started.
Get Ahead of 2022 Global Market Moves
Will the big jump in global market volatility in 2021 continue into 2022?
The Elliott wave model provides a high-confidence answer!
Once you learn what the Elliott wave model indicates, you can relax as you make decisions about your portfolio.
You'll find our Elliott wave insights in our professional-grade Global Market Perspective.
Follow the link below for forecasts of 50+ worldwide financial markets so you can prepare for what our 25+ global analysts see ahead.
Global Market Perspective
$77
Gives you clear and actionable analysis and forecasts for the world’s major financial markets.
Get insights for the U.S., European and Asian-Pacific main stock indexes, precious metals, forex pairs, cryptos (including Bitcoin), global interest rates, energy markets, cultural trends and more.
Forget the Fed -- Watch the Waves
The Federal Reserve, and to a lesser degree the European Central Bank, have dominated the conversation about interest rates lately. But watch our Interest Rates Pro Service analyst Ivo Zhelev apply textbook Elliott waves to forecast the price of the UK's Long Gilt -- and, by extension, UK interest rates -- without a single glance at central bank statements.
Why a U.S. Recession May Foil Economists’ Expectations
A recent survey reveals positive expectations for the economy by a group of "professional forecasters." Learn why you may not want to bet the farm on that expectation. This chart compares leading economic indicators around the time of past recessions with what's going on now.
Gold Mining Stocks Lead Gold Lower: What’s “Fundamentals” Got to Do with It?
In mid-April, gold mining stocks led by VANECK GOLD MINERS ETF turned down from one-year highs to 3-month lows in May. Gold followed, reversing from all-time highs on May 4 to multi-month lows on May 25. We don't need another "fundamental" explanation for why.
by LiveHelpNow!