Here we have a VALID PENNANT formed on FX:EURUSD . This type of pattern is usually formed after a strong selloff, where after the strong move, some sellers are taking profits while others are joining with the downside move. This eventually leads to a consolidation that is presented in the form of a BEARISH PENNANT. Do keep in mind that this is a CONTINUATION PATTERN and therefore we expect further downside move AFTER getting a valid breakout.
NOTE #1: If we get a break and close above 61.8% Fib level for XA leg, than that would be the 1st signal for this patterns invalidation. The 2nd or the main signal would be a break and close above the X point of the . Also a break and close above 50 MA would add extra confirmation to the patterns invalidation.
NOTE #2: A breakout to the downside would be MORE favourable if we get a break and close below the 61.8% Fib level for BC leg. That would confirm a further expected downside move, potentially up to the target.
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