HughGRection
Short

Confluence of Technicals With Clear Targets

FX:GBPUSD   BRITISH POUND / U.S. DOLLAR
689 7 11
- I've been stalking this trade for a while, and everything for a downside scenario has finally come together.
- We've formed a pretty clean head and shoulders pattern right at the top of a multiyear wedge .
- This pattern is strengthened by a break of the trend line from July, but will be confirmed by a break of the neck line at 1.59. This also happens to be the 0.236 Fibonacci retracement from the July rally.
- If this follows through, my targets are the 0.382 & 0.618 retracements depending on how fundamental factors play into continuation to the downside. Both of these levels fit quite well into previous important support and resistance .
- There is a decent chance of this correcting back up to 1.61-1.612 before continuing downward, but I'll look to sell any rallies.

Cheers

It's splitting hairs, but the bearish signal is what's important. Their aren't any symmetry requirements like on a harmonic pattern though. The only requirements are a central peak surrounded by two lower peaks with an obvious neckline. 1.59 is a very important level for indicating the strength of the trend.
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I agree, it seems more like a double top. but more importantly the bearish sentiment seems pretty valid.
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I didn't highlight it here, but what I've labeled the left shoulder is more relevant than a double top because that's where the RSI started to diverge also.
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It has the same meaning, but one shoulder is usually higher than the other. The head here is still higher than both of the shoulders so it would still technically be a valid head and shoulder pattern.
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Good chart, but it's - technically speaking - a double top.
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I agree there is downside. Please check out my analysis.
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I share the bearish bias. However, this is more of a potential double top formation, as in H&S patterns, the right shoulder cannot be that close to the head.
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