April 29, 2008 by yogi2raj
Picture-perfect head and shoulders pattern
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Courtesy Christoph Lahrs, there is a picture-perfect head and shoulders pattern forming on the USD/CHF daily chart. Further, if you look closely, you will observe positive divergence on MACD histogram to price. And, if you look even more closely, price is above the 200 EMA on the 4 hour, 1 hour, 15 minute and 5 minute charts – at least as at 8:30 pm ET Monday, September 3/07.
The head of the H&S pattern is at the 200 EMA, but price is below the 200 EMA on the weekly chart – so, there is the possibility that price will advance from here. But, let’s not forget that the overall trend is down. Any trades to the long side from here are counter the big trend, and should be taken with extreme caution.
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