After the impressive performance of the Head & Shoulders formation on GBPJPY , I have analysed few other pairs searching for this formation … and found that something started to shape on EURGBP. There is still a long way to go for the H&S to finalize, but I will certainly watch this process closely. At least three scenarios are possible:

1. – the price will break the shoulder line 0.9000 (top green zone) and travel north to negate the H&S,
2. – The price will drop to the neckline 0.8740 (lower green zone), but will not break it and will rebound north again,
3. – the price falls to the neck line and after a slight correction it will continue south while triggering the awaited H&S formation.

Future sessions will probably give us the answer, which scenario will be realized, but we can try to risk something now by betting on scenario 2 and 3 … that is, by opening Sell we can fairly determine the risk with regard to the level of shoulders line – 0.9000 – whose breaking negates the whole H & S formation. In this situation, Selling at the current level 0.8940-50 and targeting vicinity of neckline 0.8750 our Stop Loss will be above the upper green zone, which will be around 0.9020. We can lose 70p or gain 200p .. so this can be quite a good trade ?

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