RLinda ! EURGBP-> Head and Shoulders Pattern. Falling down?

8 Nov 2022

EURGBP shows a strong long-term uptrend, which began its formation in March. There is a global price channel formed on the chart, two days ago the price is testing the resistance of the channel and yesterday's bearish candle shows us the beginning of a bullish trend.

(Chart 1. The price is in the ascending channel, but the market is forming the mood for the transition to the correction phase)

A range between 0.878 and 0.856 is forming in the channel. At this moment, when the price got a resistance of the daily MA-50, we might expect that the price will go down to the support of the daily MA-200.

On the local chart, the price has formed a false-break of the resistance at 0.87734; we also see the formation of the pattern "Head and Shoulders". The price is in the phase of formation of the second shoulder and it is testing the resistance at 0.87115. I suppose that in the near future we may see a breakdown of the pattern base (support), followed by the price decrease to 0.867, and further to the liquidity zone (range support) 0.8578.

Regards R. Linda!