- GBP/USD has created an inverse head-and-shoulders pattern on the 4-hour chart.
- A convincing move above 1.2165 would confirm a bearish-to-bullish trend change.
An inverse head-and-shoulders is a bullish reversal pattern and its success rate is high when it appears after a notable sell-off.
That seems to be the case here. The pair fell from 1.3381 to 1.2014 in the five months to Aug. 12 before creating the inverse head-and-shoulders pattern.
A convincing break above 1.2165 would confirm a bearish-to-bullish trend change and open the doors to 1.2316 (target as per the measured move method).
Trend: Bullish above 1.2165
- R3 1.2332
- R2 1.2257
- R1 1.2213
- PP 1.2138
- S1 1.2094
- S2 1.202
- S3 1.1976
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