H&S EurCad daily?

[Lifesong]

Would any other traders following head & shoulder patterns please reply on your ideas of this possible pattern noticable on daily chart?

How would you trade it, what would be your trigger and where do you set SL?

On EurCad dailychart it seems that we could be heading back towards the 1.5050 to 1.49 level, based on H&S pattern. The possibility of 1.49-1.50 is also confimed by Fib expansions (see chart) and also 0.618 retracement (Weekly) of swing low @ 1.3286 and swing high 1.7507

What I would like to know is how traders would trade it if it materializes and how it should be traded. Obviously my observation might alos be wrong and I would appreciate any suggestions or views

[FibMaster]

I prefer a cleaner looking H&S, but that's just me.

If you add October to the left of the chart, your left shoulder is lost in the price action. This reduces the quality of the pattern in my mind. I really like patterns to be clean, bold and obvious.

The more obscure a pattern is, the less likely it is to be trade-able, my opinion.

[Lifesong]

Hi Neal

I appreciate your view and do not dispute it.

The reason for my initial observation of the potential pattern is that previous price action continuously confirms the 1.49 level. Consider the following observations:

1. Weekly TRSI is down,
2. Downward Fib expansion (1.00) of 1.75 high to 1.5750 low to 1.6640 swing is @ just below the 1.49 level
3. Downward Fib expansion (1.618) of 1.6640 high to 1.5758 low to 1.6283 swing is @ just below 1.49 level
4. Fiblevel (0.618) of previous longterm upmove from 1.3286 low to 1.75 high comes in @ 1.49 level
5. Lastly the 1.49 level is close to previous swing lows achieved during early Oct'08 & early Nov'08
6. It would be interesting to see what will happen when a decissive break of the 1.56 level (last swing low) materializes!!

Obviously this is not guaranteed that previous history will repeat itself, but once a major down thrust through 1.56 starts the 1.49 level could realisticly become a target.

As they say: "The future will reveal the truth"

Happy trading!!

[FibMaster]

I agree with your reasoning. 1.56 down to 1.49 is great shorting country, and I'd like to see that happen!

For now, daily is testing the up-side, and being resisted at SK 1.6120-1.6176
Above that are some scalp long opportunities (intraday, not your style).

Roughly 1.56 to 1.62 is consolidation zone.