Price target, Pivots, Fibonacci

Head and Shoulders neckline

Butterfly sell pattern

Chart pattern Price target

On the daily Chart of the EUR/USD we see a Head and Shoulders Chart pattern. The Euro closed at the brown neckline on the 5th of July and broke through the neckline on the next trading day, which triggered the Head and Shoulders pattern.


A close at Support/ Resistance levels, like the close at the Head and Shoulders neckline (blue circle), often weakens this Support/ Resistance level (see Breakout Trading/ Breakout Timing) so that a break of this S/R level (for a true breakout or a false breakout where price bounces back strongly - Stop Running and fooling breakout traders) is likely.


The target of the Head and Shoulders pattern is often the 100 % Fibonacci Extension level from the price range of the largest swing of the Head and Shoulders formation moved to the neckline break. The smaller 61.80 Fibonacci Extension level also led to a minor price reaction of the EUR/USD.

The EUR/USD bounced from this Head and Shoulders price target and started a strong upward leg after hitting the 100 % Fibonacci Extension price target of this chart pattern.

Daily Head and Shoulder pattern

The 4 hour chart below shows that the recent up move in the EUR/USD market found resistance at the monthly S1, which coincided with the daily Resistance (pink line) and the consolidation price zone of the small and tight consolidation chart pattern on the left side of the 4 hour chart below. Hence, the level around the monthly S1 at 1.2388 was likely to lead to a price reaction due to the confluence of different resistance levels.

4-hour Eur/Usd Chart Analysis

The 1 hour chart below emphasises the importance of Pivot Point analysis. The daily Pivot at 1.2243 led to a strong upward move and marks the low of today's trading range, whereby the daily R1 and the monthly S1 capped the market price besides the other reasons mentioned above.

The red ellipses show Breakout Timing setups, where market price closed at Support/ resistance before breaking it with the start of the new candle, whereby the blue ellipses are marking price reactions at important Support/ Resistance.

1-hour Eur/Usd Chart Analysis

The 5 min Euro Chart shows the importance of the daily Chart level at around 1.2290 where marked price reacted repeatedly. Furthermore, the daily chart level also changed its role between support and resistance repeatedly depending on price action in regards of true/ false price breakouts of this level.

In addition, there is a Butterfly sell pattern on the 5 min EUR/USD chart, which worked out very well. The failed breakout of the consolidation pattern (green circle) to the upside terminated at the monthly S1, which coincided with the 127 % Butterfly level, and price broke through the opposite consolidation boundary with strong momentum.

5-min Butterfly sell pattern

Market Manipulators cleared the stops

Taking out Stop orders

Hammer Candle Pattern

The Euro

1-hour Clearing of  Stop Orders by Manipulators

gaped down to the monthly S2 Pivot in the Asian session and from there the Euro retraced up to the hourly 10 SMA.

The following downward swing terminated at 8:55 a.m. GMT at 1.2082 with the creation of a hammer candle pattern/ price rejection (5 min chart red ellipse).

The Euro moved up and slightly penetrated the recent high to reach 1.2139 (green line) before marked rolled over and then penetrated the recent low at 1.2082 (blue line). This price action was purely Stop Running. The Market Manipulators cleared the stops at the recent Highs and Lows (no confirmation on 5 min chart).

The relatively long 1 min breakout candle at 1:42 p.m. (not shown) suggests the clearing of many stop and pending limit orders. Market did not close below the recent low (1.2082-blue line) on the hourly chart. The clearing of the stops on both sides (low/ high) sometimes precedes larger moves as the mainstream traders are already stopped out or fooled into the wrong market direction.

In the US Session, the EURUSD Manipulators also cleared the stops above the new high with a slight breach of this level after market already took out the stop market orders at the low of today's market range.

The red ellipses on the hourly chart shows Breakout timing setups at 7 a.m. and 1 p.m.. The Euro closed at the monthly S2 (respecting support) and market moved below it with the beginning of the new hourly candle (Termination of the bear flag/ consolidation at 7 a.m..).

We will see whether the gap opening at 1.2156 (brown line) will be closed soon.

5 min Candle Pattern Hammer | Stop Running