EUR/USD, Head and shoulder formation. Eurusd to reach the 1.20 area with a deeper retracement to the golden ration 0.618. Based on the volume profile the POCs clearly are showing a deeper retracement since the value area failed to rise above the 0.5 fib retracement and we can definitely look at a strong USD for the next days.
In terms of structure we are seeing the formation of a head and shoulder pattern , also there is a high probability that the price will fall to the previous demand zone in order to trigger all the institutional orders left at this level.
From a COT perspective we are seeing an equal number of long and short positions added by hedge funds and investment companies on the dollar index, On the Euro institutions have added a huge amount of long positions during the previous week. With that being said we might see the price falling to the 1.20 area in order to trigger the long positions added by the smart money.
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