On the weekly chart, the EUR/USD pair is demonstrating a high-probability Head and Shoulders reversal pattern where the right shoulder is currently in progress.
On October 10, Recent bearish decline below 1.1520 found its way towards the price level of 1.1420 where temporary bullish pressure was pushing the EUR/USD pair above 1.1520. Hence, a descending High was established around 1.1600.
Recently, temporary bullish recovery was demonstrated around 1.1300. Hence, another bullish pullback was executed towards 1.1499 (the upper limit of the supply zone) where another descending high was established.
Currently, As for the bearish side of the market to remain dominant, the EUR/USD pair should continue trading below the price level of 1.1400. Initial bearish targets are located around 1.1275 and 1.1100.
Bearish persistence below 1.1275 is mandatory to allow further bearish decline towards 1.1100.
However, failure to fixate below 1.1275 would enhance the bullish side of the market towards 1.1400 again. Thus, the EUR/USD pair remains trapped within a narrow price range (1.1275-1.1400).
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