DXY head and shoulders pattern formation

23 dic 2024

The Head and Shoulders pattern is a popular and reliable chart pattern used in technical analysis to predict potential reversals in market trends. It consists of three peaks: the middle peak (the "head") being higher than the other two peaks (the "shoulders").

Key Elements of the Head and Shoulders Pattern:
Left Shoulder:

Price rises to a peak and then declines.
This peak forms the first shoulder.
Head:

Price rises again to form a higher peak and then falls.
This peak is the head and is the highest point of the pattern.
Right Shoulder:

Price rises again, but this time to a lower peak (similar to the left shoulder) and then declines.
This peak forms the second shoulder.
Neckline:

A trendline drawn between the low points of the left shoulder and the right shoulder.
Acts as a key level of support or resistance.