Remember the inverse head and shoulders chart pattern I pointed out on ripple price yesterday? It was invalidated when XRPUSD made a lower low. However, if we zoom out to the 4-hour chart today, we can see another interesting setup on the cryptocurrency.
The uptrend on ripple price is still intact. When you connect the lows of January 10, January 13, January 20, and January 21, we can see that ripple price has bounced off and is trading above the trend line. However, it is worth pointing out that XRPUSD has made a lower high to succeed two higher highs. Consequently, this has translated to a head and shoulders pattern.
When you attend our forex trading course, you will know that this chart pattern is considered as a bearish indicator. The neckline seems to coincide with trend line support at $0.2300. A bearish close below this price could mean that XRPUSD could soon trade lower to its January 10 lows at $0.2000. On the other hand, if there are buyers at the trend line, a candlestick closing above yesterday’s high at $0.2414 would invalidate the head and shoulders pattern. Instead, we could see ripple price trade all the way up to its near-term resistance at $0.2500.
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