Daily Head and Shoulder pattern - hot forex trading signals

Daily Head and Shoulder pattern ~ hot forex trading signals

EURUSD Technical Chart Analysis 

Head and Shoulder Analyzed

Daily Head and shoulder pattern

The daily Head and Shoulder pattern got triggered due to the gap down last week. On Monday, May 7, we had a nice retest of the neckline, which acted as resistance and led to a sharp price drop. The market took out the low of January 23 (stop fishing) and so far respected the support zone (analysed in EUR/USD Market Analysis (14.05.12)).

Neckline break 

Below the market is the weekly trend line (low of June 2010 and January 2012) which could act as support. The classical target of the Head and Shoulder is the length of the head (A-B) projected from the neckline break (1.3061) at about 1.2551, which would also clear out the striking low from January at 1.2624.
However, it is to early to make  these assumptions and further price action will give hints of what to expect.

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False and True Breakout Patterns - forex gold trading signals

False and True Breakout Patterns ~ forex gold trading signals

Euro Dollar Breakout

False and True Breakout Patterns

On the weekly time frame we see that EUR/USD closed right at the weekly trend line (respected it). However, it is unclear how strong the support from the weekly trend line (low from June 2010 and January 2012) will be during the next weeks.

Weekly Support Resistance trading

Timing of the Breakout

On the 4 hour chart EUR/USD strongly bounced back from the support zone at 1.2641 and in the following EUR/USD moved up to each resistance level (EUR/USD Market Update 18.05.12), touched it (respected it) and broke each resistance level in the beginning of the succeeding 4-hour candle (Timing) (see also 5 min chart below).

Finally, EUR/USD moved up to the weekly trend line (orange line) and found resistance there, also due to the 61.80 % fib retracement of the recent swing down at about 1.2783, daily R2 and the 100 % fib extension from the recent swing up from 1.2641 to b at c at about 1.2790 (see 5 min chart).

4 hour chart V shape turn around Trading pattern

Breakout candle

On the 5 min chart, we see that all three breakout candles occurred in the beginning of the succeeding 4 hour candle (12, 4 p.m. 8 p.m. Timing) after each prior 4 hour candle touched the resistance level. The breakout of the breakout candle 2 did not get confirmed on the 5 min chart  so that in the following price moved back in the consolidation. Another nice three wave consolidation took place before the next breakout occurred. Finally, EUR/USD closed around the weekly trend line.

5 min false and true breakout chart analysis

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Daily EURO Support Resistance levels - most accurate forex trading signals

Daily EURO Support Resistance levels ~ most accurate forex trading signals

Support and Resistance

EUR USD Technical Chart Analysis

The EURO started to move upward today, after yesterdays news shakeout at 7 p.m. GMT, which cleared the stops above the low of Sept. 10th at 1.2755 and then reversed to clear the stops below 1.2724. 

Todays upward momentum might be the following of the daily hammer candlestick pattern on Tuesday.


The Euro moved higher with the triggering of continuation patterns (green circles/ellipses) and Breakout timing setups (red circles/ellipses) until market reached strong resistance at the 1.28 level. This resistance zone consists of the low of October 1st, the monthly S1, the 61.80 % Fibonacci retracement on the 4 hour chart and the 38,20 % Fibonacci retracement on the daily chart. Market reversed at the 1.28 level and started to move lower.

On the 5 min chart we see how market broke through the downward sloping green trend line at 2:15 p.m. (Breakout trading-prior candle closed at trend line) so that the consolidation/ triangle got terminated.  Market started to consolidate in a  shape of a continuation pattern after the breakout of the triangle and price retested the daily R1, the high and the downward sloping trend line of the consolidation (resistance becomes support-successful retest). The Euro terminated the continuation pattern on the 5 min chart and market broke through yesterdays high with the beginning of the new hourly candle after the previous one closed strongly at resistance (yesterdays high-Breakout trading).

Recent main support and resistance levels have been the low of October 1st and September 10th and the high of last Tuesday. Yesterdays high (news spike) is also likely to play an important S/R role.

Daily Support and Resistance EURO Fibonacci retracement

4 hour Daily EURO Fibonacci retracement, Resistance Levels

hourly EURO Support/ Resistance

5 min Support and Resistance

The Chart Analysis of the trading days before


On the daily chart (first chart) we see that the EUR/USD created a hammer candlestick pattern yesterday. Market moved higher and the Euro is currently trading at the low of September 10th at 1.2755 (pink line) and the daily 10 SMA. Slightly above is the hourly 200 SMA, the weekly Pivot point and the daily R2.

Yesterdays high at 1.2729 (thick blue line below) initially acted as resistance but after the level got broken the blue line acted as support and market bounced back from yesterdays high (successful retest, changing role of daily S/R levels). The rising 20 SMA on the hourly chart also provided support at 7 a.m. together with the consolidation price zone (green ellipse, orange arrow) and again at 4 p.m..

1 hour  Hammer Chart Pattern | Daily S/R | SMA

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Rejection Candle Chart Patterns Hammer - what are forex trading signals

Rejection Candle Chart Patterns Hammer ~ what are forex trading signals

Candlestick Chart Analysis

Hammer Rejection Candle

The Euro moved upwards against the US Dollar after the rejection candle/ hammer candlestick pattern on the 13th of November. There are important Support/ Resistance levels on the daily EURO US Dollar chart. Market currently trades at the daily confluence resistance level consisting of the 20 SMA and further the monthly S1 and the low of October 1st, which both held the market on the 15th of November at around 1.28 (First test). 

During the start of the US session today, market penetrated the 1.28 resistance level (second test) and moved up to the weekly R1. On the 5 min chart we see that market closed at the 1.28 resistance level with a bullish candle at 3:40 p.m. GMT just before  the Euro breached this level (Breakout Timing). The following breakout candle at 3:45 p.m. got high bullish momentum because of the stops placed above the 1.28 level. However, there was no follow through or breakout confirmation on the 5 min chart but market retested the 1.28 level and held 1.28 so far. As long as the Euro holds this level we might see a continuation pattern triggered for a true or false breakout with the start of the new daily candle (Bullish daily candle close at daily resistance-Breakout trading). The next resistance level might be the low of October 11th at 1.2826.

The 4 hour chart shows the two rejection candles on the 13th of November which contributed to the daily rejection candle.

[The hourly chart shows the news shakeout/ stop running on the 14th of November. Market cleared the stops above resistance at 1.2755 (low of Sept. 10th) and then EUR/USD reversed and the logical next target was the recent low to clear the stops of the breakout trader at 1.2724. Stop running is an important driving force in Trading.]

On the hourly and 5 min chart we see that the EUR/USD found support at the low of Sept. 10th and the Euro continued its upward move at 1 p.m. due to the increasing hourly 20 SMA and 200 SMA on the 5 min chart.


On most of the charts we see:

How prices respected support and resistance (blue ellipses), purely stop running behaviour (red arrows), breakout trading setups (red ellipses), continuation chart patterns (most of green ellipses) and support and resistance due to consolidation price zones (orange arrows).

Daily Support and Resistance EURUSD

4-hour Rejection Candles Hammer 

1 hour Hammer/ Pin bar Euro US Dollar Candlestick Chart Patterns

5 min Technical Chart Analysis Euro US Dollar

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