GBP/USD - Two Scenarios on 4-hour chart

19 Jul 2016

On the 4-hr chart, we have a bigger inverse head and shoulder pattern and the right shoulder is under progress. Inside the right shoulder, we have a smaller head and shoulder formation with neckline at 1.3158 levels.

So the two scenarios that could unfold are -

• Rebound from 1.3158 followed by a break above 1.3338 - in which case we are like to go higher to inverse head and shoulder neckline level of 1.3466 levels.
  

• Break below 1.3158 - in this case psychological level of 1.30 could be put to test again