The Euro is in major trouble and I see downside

Above, is the daily price chart of EUR/USD.

Since 18 November 2020, it has formed one of the bearish breakout patterns.

It’s called an Inverse Cup and Handle formation (shaded area).

This pattern resembles an upside down Cup with a Handle and consists of three main parts:

Part #1: The cup (Big rounding bottom on the left side)

Part #2: The Handle (Small rounding bottom on the right side)

Part #3: The brim level (low level).

Last week, we saw the Inverse Cup and Handle pattern finally complete, and then break below the Brim level at 1.1840.

When the price broke below this support level, this attracted more selling which sent the price down further.

And based on the factors I’ve mentioned today, it looks like we’re in for some euro downside.

If we use the High-Low calculation approach, we’ll find the next price target for the EUR/USD.

Here's the calculation:

Price target = Low - (High - Low)
= (1.1840 – (1.2340 – 1.1840)
= (1.1840 - 0.0500)
= 1.1340

This means we can expect the euro to drop 500 pips.