CFDs and Spread Bets are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.5% of retail investor accounts lose money when trading CFDs and Spread Bets with this provider. You should consider whether you understand how CFDs and Spread Bets work and whether you can afford to take the high risk of losing your money. Please seek independent advice if necessary.
Skimming through some charts first thing this morning, the EURUSD weekly jumped out with a couple of potential setups occurring.
Consider the chart below:
What we’re seeing here is a clear level of demand (blue) and a tested level of supply (pink), which have both been tested a few times over the past couple of years. Interestingly, we’re also seeing the potential formation of a Head & Shoulders pattern. Whilst it’s early days for our H&S, the completion of such a pattern would add significant probability to the downside.
It’s also worth noting that failed H&S patterns can be just as strong at indicating a reversal setup.
Traders could play this a few ways… we could potentially see price bounce strongly off our demand zone, in which case a solid bounce should occur; or, we could see a failure of our demand zone, resulting in a further significant decline; or, we can await to see if our H&S pattern plays out.
Either way, confirmation is needed before actioning any of the above setup ideas.
Vantage uses cookies that are essential for our website to work. We also use optional analytical cookies to help us to improve our website and the services, content and ads we provide to you which you can accept or reject here. Please see our Cookies Policy for more information on how we use cookies.