We often get asked about patterns that are included in our FX scanner. Now we are going to discuss the inverse H&S pattern in this article. This pattern suggests higher prices are likely.
What is the inverse H&S pattern? The name itself reveals half of the story, upside down to Head & Shoulder pattern. In technical analysis, we spot the inverse H&S pattern during the end of the current downturn. In contrast, we spot head & shoulder (H&S) during the end of an uptrend.
Until the price activity breaks the neckline and closing above, we do not confirm the inverse H&S pattern. See below the EURNZD chart.
If the price failed to break above the neckline, we call it a false pattern.
Calculating target price: The price difference between the head and low point at the neckline/ either shoulder.
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