Autochartist today identified the Head and Shoulders chart pattern at the 4-hour EUR/SEK charts. Autochartist rates the overall Quality of this chart pattern at the 5 bar level as a result of the strong Initial Trend (rated at the 7 bar level), below-average Uniformity (4 bars) and higher Clarity (6 bars). This chart pattern reverses the preceding upward correction to the predominant downtrend visible on the weekly EUR/SEK charts.
The “head” of this chart pattern (point A) formed when the pair reversed down from the strong resistance area lying at the intersection of the 61.8% Fibonacci Retracement of the preceding downward price impulse from May and the former strong support level 8.7600 (which reversed the pair down a few times – at the start of 2011 and 2012) – acting as resistance now. The pair is expected to continue downward movement in the nearest time.
The weekly EUR/SEK chart below shows the technical price levels mentioned above: