Hi Traders,
Have a look at GBP/USD on the 4-hour chart today.
We have a head and shoulders pattern playing out.
Notice the way I drew the pattern on the charts.
We have our left shoulder, head, and then right shoulder.
Our neckline is highlighted as an ascending trend line. Please note that neckline zones do not always have to be perfectly horizontal. They can move at an angle. We can see that this one moves and trends slightly upwards. I was waiting for a break and close below the neckline zone, which we had and then we will enter a short position upon a retrace back into the neckline zone.
Targets are previous lower prices, targeting daily lows around the 1.181 price point.
Remember, head and shoulder patterns are reversal structures and generally occur and the end of a trend. The daily bias is still bearish as we are still making lower lows and lower highs. We have seen pushback from the bulls on the lower time frames but looking for long positions is still considered a counter-trend in the higher time frames. This is why my bias is still short until proven otherwise.
The head and shoulders pattern is on the 4-hour and gives us a nice opportunity to take this pair back down to previous daily support. Let's keep an eye out and watch what happens.
Hope you all have a fantastic Thursday.
See you all on the next one.
The Vortex Trader.
Have a look at GBP/USD on the 4-hour chart today.
We have a head and shoulders pattern playing out.
Notice the way I drew the pattern on the charts.
We have our left shoulder, head, and then right shoulder.
Our neckline is highlighted as an ascending trend line. Please note that neckline zones do not always have to be perfectly horizontal. They can move at an angle. We can see that this one moves and trends slightly upwards. I was waiting for a break and close below the neckline zone, which we had and then we will enter a short position upon a retrace back into the neckline zone.
Targets are previous lower prices, targeting daily lows around the 1.181 price point.
Remember, head and shoulder patterns are reversal structures and generally occur and the end of a trend. The daily bias is still bearish as we are still making lower lows and lower highs. We have seen pushback from the bulls on the lower time frames but looking for long positions is still considered a counter-trend in the higher time frames. This is why my bias is still short until proven otherwise.
The head and shoulders pattern is on the 4-hour and gives us a nice opportunity to take this pair back down to previous daily support. Let's keep an eye out and watch what happens.
Hope you all have a fantastic Thursday.
See you all on the next one.
The Vortex Trader.