Welcome to mid-week trading, friends!
Still looking for setups to trade? I gotchu!
Today we’re taking a closer look at GBP/USD’s Reverse Head and Shoulders pattern and ETH/USD trading inside its range:
GBP/USD has been trading in a downtrend since late June when the pair got rejected at 1.2300.
The pair now trading closer to 1.1900 after finding support at the 1.1800 area. Not only that, but it’s also testing the “neckline” of a Reverse Head and Shoulders pattern on the 1-hour time frame!
Are we looking at a reversal in the making?
A breakout above the “neckline” could lead to a retest of the 100 and 200 SMAs on the chart. Of course, the 100 SMA further narrowing its gap or even crossing above the 200 SMA may also lead traders to price in a short-term bullish reversal.
If GBP/USD gets rejected at the Head and Shoulders neckline, then we’ll know that there’s not enough bullish pressure to bust through major resistance levels just yet. The pair could make new monthly lows if the 1.1900 and 1.1800 support levels don’t hold!
Hollah if you’re a HODLah!
ETH/USD is poppin’ up hesitation candlesticks near $1,040, which isn’t surprising since the area has successfully held as support at least thrice since mid-June.
Range playas can take advantage of Stochastic‘s oversold signal and make a play for the $1,150 mid-range and $1,270 range resistance levels at the first signs of buying pressure.
Not feelin’ the love for Ether?
That’s okay, you can also trade a continuation of the downtrend but only after ETH/USD has broken below the range support that we’ve marked and is showing bearish momentum below June’s $900 lows.
Good luck and good trading this 4-hour chart!