Forgot to mention price is below all the MAs I use. It means it is likely that price is in an entrenched downtrend on this weekly chart
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Price is slightly below the neckline now. However I normally like a clean break situation not a wishy-washy break like today. There is data coming out later today which could move the market one way or the other
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Price has bounced off the neckline. However this bounce is not convincing bu any standards on this weekly chart. Still bearish but will only sell a breakdown of the neckline. A TV friend wrote about not being convinced that the H&S pattern was really one. He was right. A proper H&S must have a prior uptrend to reverse from and not just because there are 3 identifiable peaks.
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Back at the 'neckline' if you can call it that. I think it is more like a up sloping support line now
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Price has broken the 'neckline' in style. 0.6400 is a possible first target
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IvanLabrie
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What trend is this H&S reversing? I see little to no trending leg before 'topping' here. I think it's safe to assume FX pairs will remain range bound for now...absolutely boring. What do you think could be the fundamentals driving this trade?
Olu
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@IvanLabrie, I hear you about the absence of a strong trend being reversed. The pattern just stuck out to be like a sore thumb. I also agree with you about the possibility of a range in currrencies. The $ put in a stonkingly good performance last week that changed some technicals on many charts etc. If the bullish sentiment does not continue then we will see reversals all over the place. The only reason I am leaning towards some more strength in $ is a weekly EW model that I have been using as the raw basis of my $ trades for the last 2 years
IvanLabrie
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@Olu, hi, yes, I think it's not a proper H&S in this case, according to the pattern's rules at least, but well. Other than that, I think a drop in gold could help your short here, looks like the top of the range was hit in it. Maybe we get a rally in USDJPY too, as equities move higher.
Olu
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@IvanLabrie, yes a drop in gold will help matters along