On the GBPUSD currency pair an interesting system of two Head and Shoulders patterns appeared. Although there is still a while to complete these formations, the completion of a smaller H&S will mean that the price will reach the neck line of the large H&S.
Maybe it’s a bit complicated… so let’s look at the H4 chart, where the large H&S is marked. It is missing 140p until it is completed, i.e. reaching the neck line (blue). The height of the large H&S is the distance from the “head” to the neck line and equals 430p.
When we move on to the hourly chart H1, we notice that the right arm of the large H&S is also an H&S formation, but with a much smaller height, about 115p. About 20p is missing at the time of writing this analysis to complete it.
If the smaller H&S is completed, i.e. if the neck line (green) is crossed and the drop is around 115p, the price will be near the neck line (blue) of the large H&S.
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I will be curious to observe the development of the situation on this pair, if it will meet my expectations and the price will go south. I am supported in this by the analysis from 7.04.2020, where I described the appearance of the “death cross” on this pair. which means the intersection of the SMA 50 moving average with the SMA200. I recommend that you read this analysis, it may give you a lot to think about.
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