“If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?”
― Lewis Carroll, Through the Looking-Glass
Euro seem to have fallen out of limelight against dollar. Not long ago, it was being dreamed and debated as a replacement of USD as the currency of choice for trade and reserve. Thanks to eurozone policies, this dream doesn't seem to be coming true, anytime soon. Stability is one of the key ingredients that EURO has lacked in recent times. This post, however, tries to cover the expected future of EUR against USD, and it seems its going downhill. How far is the obvious question. If we look at the historical prices, since it's inception, against dollar, there is a very obvious pattern to it. The pattern as technical analyst call it as the head-and-shoulders.
The red line forms the base with the head ( the circle in orange ) that rests over two shoulders ( the circles in red ). This pattern is bearish in nature, and in most of the scenarios causes prices to fall lower. If this is the case, the price should breach the red-line and fall to the next support level(0.6 by 2020).
Alternatively, the blue and the red line establish a channel, and the prices should bounce off the red-line and approach the blue line(1.84 by 2022). This is only half of the story, the other half depends on the eurozone fundamentals and the red-line.
The world actually looks confusing through a looking-glass.
