Watch list Update – EURGBP | Head & Shoulders Pattern

This is an update to the EURGBP  Head and Shoulders setup that I had pointed out in the  previous Weekly Forex Watch list post.

The chart below is what i had posted in my last post. I was looking for price action to break above the neck line of the Head and Shoulders pattern and come back down to retest it.

EURGBP Head and Shoulder Pattern

On the retest i was looking to see if price can print a Bullish candlestick signal. This would confirm 4 things for me.

  1. By waiting for a pullback back to the neckline would confirm that price is not over extended and that i’m not buying at the top.
  2.  By  showing bullish strength and bullish  candlestick signals would confirm that the pull back is only profit taking and not a sell off
  3. By waiting for the pull back it would give me a better Risk to Reward
  4. i’m entering the market upon confirmation and not on anticipation.

The chart below shows the price action post my analysis

Price presented two opportunities to enter the market. Though i would consider the first opportunity not strong enough. However on the second pull back Bulls showed strength via the Bullish Engulfing candle stick.

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