The head and shoulders pattern in technical analysis is most commonly seen as a reversal pattern. As this chart (created on Bloomberg) illustrates, the price action appears to have traced out such a pattern and today’s advance break the neckline.
There are a couple notes of caution. First, the euro has shot through the upper Bollinger Band (~$1.1900). It gains over the past two sessions appear to be taking place in thin activity. Second, next week, there are several key events, including the likely Senate vote on its tax reform bill, Powell’s confirmation hearings, and the release of the Fed’s targeted inflation measure, the October core PCE deflator, which is expect to rise. Third, the US premium over Germany on two-years, makes it the most expensive to hold euro against the dollar since the late 1990s.