I am drawn to this trade purely by its risk:reward ratio. The pattern isn't absolutely textbook nor is it that strong, but it looks robust enough for us to see an upside reversal imminently. We saw a similar pattern in the New Year which I have highlighted in the chart where we got a 200 pip movement up and I am hoping for the same here.
In essence, price has tried breaking lower on three separate occasions (representing the two shoulders and the head) and has failed indicating the bears exit the market in and around this level and that a bullish reversal is around the corner. On the longer timeframe this market is clearly downtrending but I nonetheless expect the market to respect the daily inverse head and shoulders and break upwards. That said, I will be placing a pending order to go long if the market gets to a price towards the apex of the last daily candle, rather than going into this order straight away as many things could get in the way of this analysis and render it void, hence if we do get towards the upper levels of last week's highs I don't foresee anything to stop this breaking higher to the 1.22 and beyond area.
Best of luck.
In essence, price has tried breaking lower on three separate occasions (representing the two shoulders and the head) and has failed indicating the bears exit the market in and around this level and that a bullish reversal is around the corner. On the longer timeframe this market is clearly downtrending but I nonetheless expect the market to respect the daily inverse head and shoulders and break upwards. That said, I will be placing a pending order to go long if the market gets to a price towards the apex of the last daily candle, rather than going into this order straight away as many things could get in the way of this analysis and render it void, hence if we do get towards the upper levels of last week's highs I don't foresee anything to stop this breaking higher to the 1.22 and beyond area.
Best of luck.