2016-05-05_16-14-36eurgbp daily

Hello,

Everyone has a different way at looking at his or her charts and there is certainly some art involved when looking at a chart.

Let me share with you my modest opinion about this daily eurgbp chart.

To the right of the chart we note that price formed a lower high. The stochastic is near the 80% which might indicate bullish exhaustion.

Candlestick wise the pattern is called an evening star where todays candle seems to close over 50 % of the candle formed 2 days ago.

This means that bears are taking control and could certainly be a trigger to sell.

The question is if there is going to be a bearich follow through but the signs given so far justify inserting a bearish trade.

Price might stall at the first area of support 0.77000 to 0.77500 or if the level breaks it would be good to take profits at the other level of support 0.74000 to 0.74500

2016-05-05_16-28-48eurgbp 1 hour

Now price has been coming down and whe have the stochstic indicator on this 1 hour chart oversold.

If price confirms our short trade idea then we might sell the next stochstic crossing down once it moves away from this lower level giving us a better entry price.

If the 50 day moving average continues to come down then we might also try to short from this dynamic level of resistance.

Best of Pips

One thought on “EURGBP Daily Head and Shoulder Pattern”

  1. Daniel Chan - Forex.Today says:

    thanks Nuno very interesting analysis

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