Matt Simpson, CFTe, MSTA
CityIndex
The weekly Head and Shoulders reversal is still in play (although the neckline has already been challenged this week) but price is currently just below this key level.
I am open to the distinct possibility that the H&S may become invalidated as price grinds higher, but due to the elongated Bearish Engulfing candle 5 weeks ago I will still be seeking areas of resistance to fade into over the coming weeks.
The daily timeframe is within a messy channel but due to the overlaps of the daily ranges (and intraday price action) I strongly suspect this is a correction, building up to another leg down.
As we are approaching the weekend I am not looking to enter this week. Ideally we will be treated to bearish reversal candles around current levels, which may then provide a bearish sell signal to enter short next week.
In the event we break above the neckline then intraday momentum is bullish, so buy setups within the channel would be preferred. Additionally we could use a bearish break of this channel in future to assess potential sell-opportunities back in line with the weekly bearish momentum.
Until a signal is presented, this will remain in my hotlist, but not one to touch just yet.
CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed
Recommended Content
Editors’ Picks
EUR/USD consolidates gains below 1.0700 amid upbeat mood
EUR/USD is consolidating its recovery below 1.0700 in the European session on Thursday. The US Dollar holds its corrective decline amid improving market mood, despite looming Middle East geopolitical risks. Speeches from ECB and Fed officials remain on tap.
GBP/USD clings to moderate gains above 1.2450 on US Dollar weakness
GBP/USD is clinging to recovery gains above 1.2450 in European trading on Thursday. The pair stays supported by a sustained US Dollar weakness alongside the US Treasury bond yields. Risk appetite also underpins the higher-yielding currency pair. ahead of mid-tier US data and Fedspeak.
Gold price shines amid fears of fresh escalation in Middle East tensions
Gold price rebounds to $2,380 in Thursday’s European session after posting losses on Wednesday. The precious metal holds gains amid fears that Middle East tensions could worsen and spread beyond Gaza if Israel responds brutally to Iran.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.