This type of pattern can usually be spotted after an extended move in either direction.
Tweezer tops appear after an uptrend or an extended move up. The first candle must match the main trend or the latest move (so it will be a bull candle) and the second will be a counter trend candle (so it will be a bear candle), but both must test the same highs. Check out the picture below:
Notice the first candle is bullish and it’s followed by a bearish candle and they both test the same high point. After the candle formation is complete, price reverses and a down move starts.
Tweezer bottoms appear after a downtrend or an extended down move. The first candle must match the main trend or the latest move (so it will be a bear candle) and the second will be counter trend (bull candle), but they will both test the same low. Here is the picture to go with the explanation:
Again, notice the valid sequence: first candle is the same as the recent move (down), the second is counter trend (up) and both must test the same low point.
Tweezer bottoms and tops suggest strong support or resistance at that level and give us a hint that the level will hold and price will reverse. They can mark the end of a trend, the beginning of a reversal or retracement or even the end of the retracement as they are reversal patterns. One more important point is that Tweezer bottoms or tops can look different than the ones I show on my pictures, but the sequence must be the same: trend candle – counter trend candle – testing the same high/low.
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.