We visit the EURUSD daily chart and noticed a head and shoulders pattern in the making.
A head and shoulders pattern looks like a human head with 2 shoulders on either side. The shoulders are lower than the head and are often of equal height to each other. The blue line extending horizontally across is the neckline, which connects the 2 low points.
This is a top reversal pattern, or a bearish signal. Of course, this trade setup is still in the making and is only confirmed if prices follow the direction of the red arrow, breaking below the neckline. The pattern is however void once prices break the high of 1.3484.
You can expect many traders to go short if prices break below the neckline level of around 1.3017.
Written By: AsiaPacFinance.com
AsiaPacFinance.com’s goal is to be the primary independent source of reliable and actionable trading ideas. We provide online trading courses and trading tools for a growing audience of self-directed traders.
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