Possible Head and Shoulders Bottom Pattern in Euro

The euro has been sold off in early North American activity.  It does not appear to be news/event driven, but rather some week end profit-taking that triggered some stops.   We do note that many were looking had targeted the $1.2700-$1.2750 objective.  And there is a trend line drawn off of last November’s high that intersects in that range today.   That said, there appears to be a head and shoulders bottoming pattern carved out in the euro.  The down sloping neckline comes in near $1.2400 now and violation of that would negate the pattern.     The more immediate technical condition appears weak with the euro having initially moved through yesterday’s highs, making a new high for the move, and then breaking below yesterday’s lows.  Stops now are thought to be below $1.2600 where some options structures are have reportedly been struck.  Hourly momentum studies are as over-stretched as they have been this week, suggesting the odds may favor a bounce into the European close.