The London session has set the tempo for the last two days. We've seen two major down swings starting from minute one of the London open, which North American traders were happy to continue. On Monday, we saw a break down into a consolidation zone which held for just over 24 hrs. By the beginning of the New York session, it became clear that a strong bearish move was coming. Price formed a 6 hour long rising wedge pattern, which broke and failed the retest a few hours later (See my post about it below). EURUSD dropped to its lowest point of the day, before consolidating yet again into a very shallow ascending triangle. On the chart as well as in my last post you can see in the comments that I was anticipating a short retracement, overnight back towards the top of the consolidation zone, which came but only as far as the 3rd quadrant. By the London open this morning, price had just finished forming arguably the most accurate bearish signal, the head and shoulders. This pattern preceded an 85 pip drop in price which broke a 2 year low for the pair. This move might indicate that market structure has finally broken and the 7 year long consolidation pattern EURUSD has been in could be coming to an end. I posted Monday, questioning whether or not the asymmetric triangle pattern which has been forming since early 2016 would hold, and it seems my gut feeling that it would is being proven wrong. Just another reminder to trade what you see happening, not what you think! Until proven otherwise, the only direction I see price going is down!
