4-hour EUR/GBP Inverse Head and Shoulders Pattern
Inverse Head and Shoulders Pattern
Pattern Formation:
Left Shoulder: The first dip followed by a rise.
Head: A deeper dip than the left shoulder followed by another rise.
Right Shoulder: A dip similar in depth to the left shoulder followed by a rise.
Neckline: The horizontal resistance line connecting the highs of the left shoulder, head, and right shoulder. In this chart, the neckline is marked at approximately 0.85200.
Implications:
An inverse head and shoulders pattern typically indicates a reversal from a downtrend to an uptrend.If the price breaks above the neckline, it suggests a potential bullish breakout, signaling a buy opportunity.
Key Observations:
The EUR/GBP has been in a downtrend.
The pattern is forming at the end of the downtrend, indicating a possible reversal.
The price is currently near the neckline. A break and close above the neckline would confirm the pattern and could lead to further upside potential.
Trading Strategy:
Risk Management:
Monitor the volume during the breakout. Higher volume increases the reliability of the breakout.Be cautious of false breakouts. Wait for a confirmed close above the neckline.
Pattern Formation:
Left Shoulder: The first dip followed by a rise.
Head: A deeper dip than the left shoulder followed by another rise.
Right Shoulder: A dip similar in depth to the left shoulder followed by a rise.
Neckline: The horizontal resistance line connecting the highs of the left shoulder, head, and right shoulder. In this chart, the neckline is marked at approximately 0.85200.
Implications:
An inverse head and shoulders pattern typically indicates a reversal from a downtrend to an uptrend.If the price breaks above the neckline, it suggests a potential bullish breakout, signaling a buy opportunity.
Key Observations:
The EUR/GBP has been in a downtrend.
The pattern is forming at the end of the downtrend, indicating a possible reversal.
The price is currently near the neckline. A break and close above the neckline would confirm the pattern and could lead to further upside potential.
Trading Strategy:
- Entry Point: Consider entering a long position if the price breaks and closes above the neckline (0.85200) with significant volume.
- Stop Loss: Place a stop loss below the right shoulder to manage risk.
- Target Price: Measure the distance from the head to the neckline and project it upwards from the breakout point to set a target price.
Risk Management:
Monitor the volume during the breakout. Higher volume increases the reliability of the breakout.Be cautious of false breakouts. Wait for a confirmed close above the neckline.
Find the discipline and stability to be a long term winner with us 📚
𝗙𝗥𝗘𝗘 𝗧𝗘𝗟𝗘𝗚𝗥𝗔𝗠 ▶ t.me/HKXAU
💱Recommended Broker▶ bit.ly/3FE59ZU
Open a Live Account: CLAIM UP TO 50% WELCOME BONUS!
𝗙𝗥𝗘𝗘 𝗧𝗘𝗟𝗘𝗚𝗥𝗔𝗠 ▶ t.me/HKXAU
💱Recommended Broker▶ bit.ly/3FE59ZU
Open a Live Account: CLAIM UP TO 50% WELCOME BONUS!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.