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  • EUR/USD – Not Really a Head and Shoulders Pattern; Just Ranging

    From fxtimes.com

    Head and shoulders? The EUR/USD is held under the 1.30 level, finding resistance at 1.2967. In the 1H chart, it looks like a head and shoulders pattern is developing. In it of itself, yes – there is a couple of shoulders and a head with the neckline near 1.2880. However, in the real sense of what head and shoulders pattern is suppose to represent – a topping pattern – this is not the case. Ranging: Instead EUR/USD is just choppy and ranging, actually with a slight and very short-term bullish momentum bias. The 1H RSI reading tagged 70, and has so far remained above 40. Returning the 1H RSI above 60 would be a ... (full story)

By the way great analysis Fan - you do come up with very clear scenarios to consider. Cheers
  •  Guest
  • | IP XXX.XXX.173.93
who said something like "the most violent market moves come from a failed pattern?" quite a few traders, actually.

http://en.wikipedia.org/wiki/Price_action_trading
That head shoulder is there, than opportunity.
Quoting Sanguis
That head shoulder is there, than opportunity.
And at DAX
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  • Post #6
  • Quote
  • Edited at 8:52pm Oct 3, 2012 2:17pm | Edited at 8:52pm
Quoting Guest
By way loaded , what sort of entry long corresponds with ur current view of mkt. , euro that is , gbp if u wish to comment. EU 12866 or abit higher 12882
At 100 bars (look back) both the H4 and D1 charts project rising vectors using my polynomial regression tool with exactly the same expectations as Fan assessed for his uptrend scenarios. The difference is that by my tool I have 95% confidence in the estimate so I have been trading up the Euro since the last low @ 1.28032. Not trading GBP but that has a falling H4 vector (and price is falling as we speak) and a rising D1 projection. Meaning it might tank at some point today or tomorrow before rising (the tool projects support for GBP @ 1.59940 +/-).

PS: Do note that I had observed some interesting dynamic and recorded the prediction on one of Fan's threads that the Euro was building up for a sustained uptrend a couple of days back and it has played exactly (though I had not anticipated the current stall in movement and I am a bit frustrated by it). In any case I am delighted that one of Fan's scenarios obtained by alternative means is in agreement with the regression output. Cheers
Not concerned with m1kz comment, but very appreciative of the respect by the rest here.

EUR/USD is congesting through the US session just above 1.29. No significant technical clues for me. Anyone see an edge here? I only see an ever so slightly bullish bias with price staying above 1.2880.

- Fan
Quoting Guest
By way loaded , what sort of entry long corresponds with ur current view of mkt. , euro that is , gbp if u wish to comment. EU 12866 or abit higher 12882
Do not wish to specify what would be a good entry for EU at this point since you do not have access to my charts and my entry criteria based on how my tools work (and I have been in since 1.28039). But for GBP clearly if you see a bounce about the area indicated you can be sure that at least others anticipate it too (though I am not trading that pair). Cheers
  • Post #9
  • Quote
  • Edited at 8:59pm Oct 3, 2012 2:42pm | Edited at 8:59pm
Quoting fxtimes
EUR/USD is congesting through the US session just above 1.29. No significant technical clues for me. Anyone see an edge here? I only see an ever so slightly bullish bias with price staying above 1.2880.

- Fan
From my comments above I guess my take is pretty obvious. But also observe the behavior of price about the 50 MA and note how despite everything (poor reports, etc) the Euro (H4) has kept above the 50 MA (for two days straight) - usually (from experience) this is strongly indicative of a launchpad for a sustained move (of course there is always a 1/20 chance that I am wrong). But in terms of a mean reverting market and given my regression estimates my money has been and still is on an upside move. But we will see.

PS: Note that since the correction started the Euro has remained below the 15 and then 50 MA's all this while on the H4 and it is only since yesterday or day before (just around NY close) that it edged above the 50 MA and is camped out there (not moving up by much but not moving below). Just an observation.
  •  Guest
  • | IP XX.XXX.177.243
Guy, this is a head and shoulders - it will fake out most, check out the AUD/USD coming up later on - its setting up for the drop on the news. In a short position from 1.2904 this morning just waiting for the drop.
Quoting fxtimes
Not concerned with m1kz comment, but very appreciative of the respect by the rest here.

EUR/USD is congesting through the US session just above 1.29. No significant technical clues for me. Anyone see an edge here? I only see an ever so slightly bullish bias with price staying above 1.2880.

- Fan
I see 1.27xx is a must to go upwards. My feeling and nothing to back this up the sell is not exhaustive yet.
  •  Guest
  • | IP XX.XXX.177.243
Markets going to drop - Turkey and Syria are at it!!!
Close above 1.2924 presents better opportunity to go long. close below 1.2888 presents good opportunity to short based on most recent S&R levels on the narrowing range. now just have to wait for either to happen
  •  Guest
  • | IP XXX.XXX.173.93
eur/usd bounced down from 50 week ma, what does this mean? I would place a stop under 1.18 if I traded this slow moving instrument.
  •  Guest
  • | IP XXX.XXX.129.93
hey loaded , im beginning to enjoy your analysis -reprts , very well thought out !How can i learn more about your studies ? George, old fx veteran
By way , gbp bulls have had a hard week since friday really
My view, H&S pattern is working at moment, and e-usd move to 1.2800 as range low, due to range top was capped in yesterday US session and today London early session.
There is no bullish momentum on H1, when candle body close below ma100 line, then, all algoes, signal, etc. will trigger massive selling orders. Next, 1.2750 will be run, or even 1.2625 may be hit, just 100 plus to 200 pips gap after range breakout.
Eur-usd is very technical-oriented. During correction, it won't miss 38% level.
Quoting fxtimes
Not concerned with m1kz comment, but very appreciative of the respect by the rest here.

EUR/USD is congesting through the US session just above 1.29. No significant technical clues for me. Anyone see an edge here? I only see an ever so slightly bullish bias with price staying above 1.2880.

- Fan
I'm still trying to figure out why Asian and Middle Eastern players are still supporting .2884 area - btw it used to be a very strong support and resistance several times before. So any pop or poop down means a lot of struggle.

1.29 still a magnet at the moment, though in my 2cts it's better to have a ABCD down before a strong push up rather than all these coiling effects (though very good for day trades, to the point where one don't even need to stare at the screen, set TP and SL and RS lines) and let it run.

Hopefully we can get out of bloody range and break soon, can't see any triangle or whatever pattern forming at all now.
longer term (4hr) Reverse head and shoulders with neck line around 1.2970 anyone?
Quoting Guest
hey loaded , im beginning to enjoy your analysis -reprts , very well thought out !How can i learn more about your studies ? George, old fx veteran
By way , gbp bulls have had a hard week since friday really
Hey George - you can get my cell from Tony and give me a call. You understand. Cheers
  • Post #20
  • Quote
  • Edited at 11:53pm Oct 3, 2012 11:37pm | Edited at 11:53pm
I personally see a revisit to the 1.2803 area before a major bull push if any. I am shorting to 1.2803 as of now. My snuggy stochastic tells me so, but again nothing is written in stone as far as indicators are concerned. Thought I would offer my two cents.
  •  Guest
  • | IP XXX.X.222.214
i agree what jack168 said. eu is reaching fibo 38.2% (1.2041 22/07/2012 - 1.3171 17/09/2012). EU will down to 1.2740 by technical if i am not wrong. chart weekly comfirm it
  •  Guest
  • | IP XX.XXX.99.34
If that's not a head and shoulders pattern then there is no such thin as a head and shoulders pattern. Top of the head at the prior top. Left shoulder, and right shoulder. What ever else it may be how could it not be a head and shoulders pattern. Even if the pattern does not play out it does not negate the fact of a head and shoulders. Looking at some of the comments it seems to be a case of "The emperor's new cloths" psychological effect where people find a reason to deny their own eyes simply because they are long or have a long bias. It is what it is, and all the talk about waves and regressions may be true but, the pattern still has two shoulders and a head and the head formed a top...lol
Quoting Guest
If that's not a head and shoulders pattern then there is no such thin as a head and shoulders pattern. Top of the head at the prior top. Left shoulder, and right shoulder. What ever else it may be how could it not be a head and shoulders pattern. Even if the pattern does not play out it does not negate the fact of a head and shoulders. Looking at some of the comments it seems to be a case of "The emperor's new cloths" psychological effect where people find a reason to deny their own eyes simply because they are long or have a long bias. It is...
Guest. It is a head and shoulders pattern except for 1 thing. A head and shoulders pattern is a reversal from a swing high. This one occurred inside consolidation. Consolidation negates price action of all kinds. The guy knows what he's talking about.
And here's a tip. All price action signals should be at a point of confluence - ie significant S/R levels formed by horizontal lines, trend lines, Fibonacci levels, big round numbers and so on, the more confluences the better. Not inside a consolidation. Now be told. Not by me, because I only stand on the shoulders of giants... or try to.
Well looks like the bulls won after all.
  •  Guest
  • | IP XX.XXX.56.185
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  • Story Stats
  • Posted: Oct 3, 2012 12:25pm
  • Submitted by:
     fxtimes
    Category: Technical Analysis
    Comments: 25  /  Views: 4,128