Shooting Star Pattern in EUR/CHF

A textbook shooting star (bearish reversal) pattern has formed on the EUR/CHF daily chart. Additionally, looking at the daily chart above we can see that there is a confluence of indicators as price reached up just shy of the resistance of the 200 period simple moving average before reversing.

The 4 hour chart gave us a chance to get into this trade early as it showed a nice pin bar (a pattern similar to the shooting star) reflecting a lack of confidence in the bulls.

Typically these patterns are traded by entering short with a sell stop order below the low of the shooting star or bearish pin bar pattern. Keep in mind that these price action patterns have the best predictive value when there is a confluence of indicators and key support/resistance levels come into play.