The fall in EUR/USD highlights the head-and-shoulders top
EUR/USD slips to session low
Fresh euro selling has sent it down nearly a full cent on the day and wiped out yesterday's gains. The latest move looks flow-driven into the weekend.
Technically, the head-and-shoulders top remains the dominate feature on the chart. With today's drop, the neckline is now 100 pips away. It will be tough to break through before the ECB on Thursday and there are plenty of reasons to think the ECB could unveil something hawkish but if/when a taper comes, there's also a good chance of a sell-the-fact trade.
German-US two-year yield spreads at 17-year lows are like a gravitational force for the pair, especially if the Fed hikes in December and indicates more to come.