Major psychological handle? Check! Descending channel? Check! It doesn’t get much sweeter than this! If you’re feeling bearish for the pound, you might just get a chance to short it as it retests the falling trend line at around 1.6300. But be warned! A double bottom formation has formed and it has its neckline right at the 1.6300 handle. According to the School of Pipsology, double bottoms are reversal patterns, so the pair could be gearing up for a major breakout to the upside.
Rest assured, you won’t find dandruff on USD/JPY! Not with that potential head and shoulders pattern in the works! Haha! As you can see, we have the formation’s neckline set right at the 1.6150 handle. If price goes below this, it might not stop until it hits 1.6100!
Euro bears finished hard and strong last Friday, but will they continue to dominate EUR/USD today? Well, it seems like it should be smooth sailing for sellers until they hit 1.4050. That’s where it’ll get interesting! If price manages to bounce off this level again, it could complete a double bottom formation. But if bears take it below 1.4050, the pair may be in for fresh lows! Still uncertain which direction to play? Wait for confirmation from candlesticks to guide the way!
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.