GBP/USD technical analysis: Teasing inverse head-and-shoulders breakout


  • 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.

GBP/USD is flirting with the inverse head-and-shoulders neckline resistance of 1.2165 at press time.

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).

4-hour chart

Trend: Bullish above 1.2165

Pivot points

    1. R3 1.2332
    2. R2 1.2257
    3. R1 1.2213
  1. PP 1.2138
    1. S1 1.2094
    2. S2 1.202
    3. S3 1.1976

 

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