A/U: An example of a bullish 'inverse Head and Shoulder' pattern:
Daily chart inverse H&S? The theory with these patterns is that the suggested bullish continuation is equivalent to the height of the H&S, that is, the height of the ‘Head’ from the ‘neck line’. The height of this H&S is about 380 ~ 400 pips or so. This would suggest a target for any bullish follow through to be up near the 0.945 region.
The key then is to wait for price to make a close up through the neck line of the inverse H&S pattern. This resulted on Friday 7th March 2014 and this is what I then wrote:
Friday 7th March (11.45 am)
I am placing a trade order in based on the bullish 'inverse H&S' pattern that looks to be unfolding on the A/U daily chart. The Aussie has made a daily candle close up through the 'neck line' of this pattern and I'm looking for a test of this key level before any possible bullish continuation:
A/U Inverse H&S pattern completed 10th April 2014!
I had also suggested that this target region tied in with the weekly Ichimoku chart as well. Price has been above the Cloud on the 4hr and daily time frames but below the Cloud on the weekly chart. The bottom edge of the weekly Cloud posed some resistance though and made this a suitable area to look for profit. The bottom of the weekly Cloud came in at around the 0.94 region though too which wasn't too far from the inverse H&S target so this gave added confluence to the 'take profit' region: