EUR/USD Forms Head and Shoulder with 1.4140 Neckline

EUR/USD Forms Head and Shoulder with 1.4140 Neckline Short-term Following up with yesterday's updates, the EUR/USD indeed is declining further after the bearish divergence.The market has reached the important 1.4140-1.4150 support. The market developed a head and shoulder and the 1.4140 level is the neckline. If we break it we might extend the current towards 1.4050-1.4060 level. The 4H chart also shows the head and shoulder and the 50% retracement target in the 1.4050-1.4060 zone. Other clues for the bearish outlook in the short-term is the bearish divergence, although it has already been resolved. Still, the RSI continues to decline and a failure to cross its 3-period moving average suggests bearish continuation. Candlestick action also reflects bearish continuation as the bears look more dominant since the market reached 1.4250. The current decline should not break below 1.40 area as wave 4 should not overlap wave 1. If it does, the bullish scenario is put aside, and we can anticipate for a major reversal. For now, if the neckline of 1.4140 is broken, we should have a short-term decline towards 1.4050.