Above Chart shows a good example of a head-and-shoulders top. The three bumps are clearly visible, with the center bump being the highest of the three. The left shoulder usually appears after an extended uphill run. The entire formation seems to stand alone when viewed in the context of a year’s worth of daily price data. This stand-alone characteristic makes the head-and-shoulders top easily identified in a price series. A head-and-shoulders top formation where the center peak towers above the other two. A pullback to the neckline occurs frequently. A trend line drawn along the bottoms of the two troughs between the three peaks forms the neckline. The line may slope in any direction but slopes upward about 52% of the time and downward 45% of the time with the remainder being horizontal. The direction of neckline slope is a predictor of the severity of the price decline.
EURUSD: Technically Euro has rose from the level of 1.2620 level and has rose to the level of 1.3120 and short correction of the rise testing the level of 1.2975 forming the Left Shoulder. There after the rise from the level of 1.2975 tested the fresh high of 1.3485 was the top of the Head and again tested the lower support @ 1.3000 levels where the neck line was seen and also the double bottom was formed. Short bounce was seen from the double bottom level testing the level of 1.3285 which was the resistance of Left shoulder & rise by 61.8% of the fall where reversal in price is expected from here. On lower side support is seen at 1.3000 to 1.3030 level where the Neck Line is coming and sustain trading below the same will bring to the lower level of 1.2700 to 1.2660 level in near to medium term.
GBPUSD: Technically Pound has rose from the level of 1.5235 level and has rose to the level of 1.5925 and short correction of the rise testing the level of 1.5640 forming the Left Shoulder. There after the rise from the level of 1.5640 tested the fresh high of 1.5990 was the top of the Head and again tested the lower support @ 1.5617 levels where the neck line was seen and also the double bottom was formed. Short bounce was seen from the double bottom level testing the level of 1.5920 which was the resistance of Left shoulder & rise by 76.4% of the fall where reversal in price is expected from here. On lower side support is seen at 1.5600 to 1.5640 level where the Neck Line is coming and sustain trading below the same will bring to the lower level of 1.5300 to 1.5250 level in near to medium term.
