Euro futures completed a head and shoulders with an extended right shoulder by breaking out through the neckline (red on chart), which was at VWAP of a megaphone that started forming in late January.
The euro will almost certainly redraw that megaphone bottom with this move down, which probably targets roughly 1.00 or a little above.
Then it will probably reverse to up past the head of the H&S.
Take a good look at that head and shoulders, because it is a perfect example of a head and shoulders with an extended triangle right shoulder, and those almost always complete with a breakout downwards.
But that H&S was shallow, and that worries me a bit.
Any megaphone or H&S or triangle can morph into a different megaphone or H&S or triangle. If the euro reverses at the original bright blue megaphone VWAP, that triangle right shoulder was a B wave within an ABC down to the bottom of a topping megaphone within the megaphone that started forming in January.
That means a new megaphone across that blue VWAP, if the euro starts one here and it breaks out upwards, would take the euro to past the existing H&S head before the run to 1.00.