A descending triangle is a bearish continuation pattern that usually forms at the end of a downtrend, so it’s rather weird that one formed on EUR/GBP’s 1-hour chart since the most recent trend was an uptrend. Anyhow, stochastic is already indicating overbought conditions while the moving averages are just about to cross-over into downtrend mode, which are real confidence boosters for our downside bias. And if the pair does break out to the downside, then price will likely move lower for 70 pips, based on the height of the pattern. However, do keep in mind that there’s always a chance that the pair will break out in the opposite direction, though, especially since the prior trend was an uptrend.
Is GBP/CHF in for more downside moves? Well, a rising wedge appears to have formed, so there’s a higher-than-average chance that the pair may move lower. If the forex chart pattern is validated, then the resulting selloff may have enough steam for a 190-pip move. The only worrying thing is that stochastic is currently indicating oversold conditions, which may attract enough bulls to push price higher and invalidate the pattern, so make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
GBP/AUD has been moving higher while seemingly trapped inside an ascending channel. And presently, price is grudgingly moving lower for a potential test of the channel’s support area. However, the pair already seems to be getting some buyers at the mid-channel area. And looking at our technical indicators we can see that the moving averages are indicating a healthy uptrend, with the 100 SMA acting as dynamic support to boot. Stochastic, meanwhile, is still some distance away from oversold territory, so there’s still a chance that the pair could go lower.
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.