11 Sep 2015

EUR/GBP - BULL FLAG OR HEAD AND SHOULDERS ?

EUR/GBP H4

The rate has been stuck in a consolidation pattern for the past 2 weeks after an amazing rally higher.
The risk sentiment based false upside break on 24th of August makes it look like a falling wedge/bull flag pattern, however, as other pairs have already tested the spike and ignored it I am looking at it as a head and shoulders pattern.

I am looking for a downside break below the neckline at 0.7245. This break should take the rate down to at least 0.7100 - the 100% breakout target.

A daily close above 0.7380 would invalidate my immediate bearish bias for the pair as it would trigger the bull flag scenario and would indicate a start of a broader retracement.






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