The exchange rate is on or just above the neckline of a large H&S pattern visible on the 4-hour chart. If it breaks there is a long term downside target of 1.3165 based on the pattern length. The line of support, including the monthly pivot at 1.3440 could provide a closer.
The previous trough low at 1.3507 is key, as if broken it will make the break of the neckline decisive and also reverse the rising sequence of peaks and troughs to a descending one, thus marking a change in trend. It is possible there will be considerable support at this level with a bounce possible to perhaps 1.3535 or even 1.3560 before the probable resumption of the downtrend.
by Joaquin Monfort, Analytical expert , Forex4You © 2011
more EUR/USD Technical Analysis