April 16 (Reuters) - EUR/USD is following a textbook inverse head and shoulders recovery off the March 1.1409 (EBS) low on the daily chart, but it needs to overcome key technical resistance in order for it to be completed by reaching 1.1855.

The 1.1855 level is the measured objective of this head and shoulders pattern, calculated by taking the vertical distance from the head at 1.1409 up to the neckline, then projecting that same distance upward from the neckline breakout point that occurred on April 8.

For the EUR/USD bullish cycle from the 1.1409 low to persist, spot needs to first overcome the 1.1826 Fibonacci level, a 61.8% retrace of the 1.2084 to 1.1409 (January to March) EBS drop. If there is a 1.1826 Fibonacci break, spot could overshoot the 1.1855 measured objective and trade well above the 1.1900 psychological level.

However, a failure to break above the 1.1826 Fibonacci level this week could be an early sign that EUR/USD is topping out.
Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)