On my last CADJPY idea, I had stated that we was seeing a pattern, this pattern was respected by market price and reversed and broke the neckline to the downside with strong momentum just as I expected. Along with this, we also seen flags indicating more moves to the downside showing pressure. Right now we can see that market price has support and we MAY see market price continue to the downside.
Head and Shoulders:
It is formed by a peak (shoulder), followed by a higher peak (head), and then another lower peak (shoulder).
A “neckline” is drawn by connecting the lowest points of the two troughs.
The slope of this line can either be up or down. Typically, when the slope is down, it produces a more reliable signal.
A is a chart pattern that’s formed by two declines separated by a brief consolidating retracement period.
The flagpole forms on an almost vertical panic price drop as buyers get blindsided from the sellers, then a bounce that has parallel upper and lower , which form the flag.
During the consolidation, traders should be prepared to take action should price break down through the lower range level and/or make a new low as this indicates the bears are in control again to force another sell-off.
When the lower trendline breaks, it triggers panic sellers as the downtrend resumes another leg down
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