The EURUSD currency pair is displaying increasingly apparent signs of a reversal in the European trading session this afternoon. After experiencing initial selling pressure, the price is now forming an inverse head and shoulders pattern, which has been confirmed by a breakout above the neckline. This technical formation indicates a shift in momentum from a bearish trend to a bullish trajectory. Additional support stems from the ascending zigzag movement and a turning Moving Average (MA), reinforcing the signal that buyers are starting to dominate the market.
The Stochastic indicator, which is rising from the oversold territory, also adds further confirmation of increasing buying pressure. This situation creates an opportunity for EURUSD to continue strengthening towards the next resistance level around 1.16495. As long as the price remains above the neckline and does not break below the support area, the upward momentum is expected to sustain, indicating a potential healthy short-term trend shift.
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In summary, the combination of technical signals from the inverse head and shoulders, zigzag, MA, and Stochastic provides robust support for the potential continued strengthening of EURUSD. Nonetheless, traders are advised to monitor price reactions at the major resistance area, as failure to break through this zone could trigger a brief correction before the bullish trend persists. The increasingly solid price structure indicates a reduction in selling pressure, paving the way for a new upward phase in the near future.
Technical References: buy above 1.16005
Potential Take Profit 1: 1.16400
Potential Take Profit 2: 1.16495
Potential Stop Loss 1: 1.16085
Potential Stop Loss 2: 1.16005
