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Traders Looking For Possible Head and Shoulders Pattern on EURUSD & US30

Authored by TD Markets
16.10.2023
Technical Analysis
0
4 min
Traders Looking For Possible Head and Shoulders Pattern on EURUSD & US30

In this article, we will examine the possibility of a Head and Shoulders pattern forming on the EURUSD currency pair and the US30 stock market index. Technical analysis is a crucial tool in the arsenal of traders worldwide, helping them make informed decisions based on historical price movements and patterns. One such pattern that traders keep a close eye on is the Head and Shoulders pattern, which can provide valuable insights into potential trend reversals. 

The US30 Performance 

Are these signs of bullish momentum on US30?

US30 is trading within a weekly timeframe bullish trend. A few weeks back the market aggressively broke below the descending structure and created a low and a double bottom around 32827.34 then rallied to the upside. 

This price action caused the market to break above the previous resistance zones around 33292.44 and 33568.22. Traders are keeping a close eye on a possible inverse head and shoulders pattern which will add to the confluence and increase the probabilities of the market pushing to the upside. As such, traders anticipate a retracement before looking for bullish trading opportunities.

Traders Looking For Possible Head and Shoulders Pattern on EURUSD & US30

The EURUSD Performance 

EURUSD is back at the support zone.

The USD strengthened against the EURO at the back of last week's inflation numbers and aggressively dropped +120 pips back to the support zone. The current price action suggests a possible inverse head and shoulders pattern is forming which could see the market push to the upside. Traders are waiting for a break of structure to the upside before looking for trading opportunities.

Traders Looking For Possible Head and Shoulders Pattern on EURUSD & US30

Read More: What are Safe Haven Currencies?

The XAUUSD (GOLD) Performance 

(UPDATE) -  GOLD has completed the bullish setup 

GOLD has now broken above the descending structure which provides traders with a lot of possibilities and patterns however looking at the previous market structure, GOLD could be setting up for an aggressive rally to the upside. From a short-term perspective, traders anticipate a retest of the support zone around 1891.91 which will provide short-term trading opportunities to the downside which targets sets on the support zone.

Traders Looking For Possible Head and Shoulders Pattern on EURUSD & US30

Final Thoughts On Today’s Analysis 

The Head and Shoulders pattern is a popular and reliable chart pattern used by traders to identify potential trend reversals. In the cases of EUR/USD and US30, traders are currently evaluating the possibility of these patterns, with EUR/USD showing signs of a potential bearish reversal and US30 showing signs of a possible bullish reversal. 

While these patterns can provide valuable insights, it is crucial for traders to use them in conjunction with other indicators and analyses to make informed trading decisions. Additionally, always have risk management strategies in place to mitigate potential losses. Subscribe to our YouTube channel to learn more about our analysis. 

Authored by TD Markets
16.10.2023
Technical Analysis
0
4 min
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