Yo! I’ve got a couple of chart patterns for the pound in today’s intraday charts update. To be more specific, I found a triangle on EUR/GBP and a descending channel on GBP/CAD.
EUR/GBP has been trading sideways while beginning to taper into a point, as y’all can see. In the process, a symmetrical triangle pattern appears to be forming.
A symmetrical triangle could potentially break in either direction, so we don’t really have a directional bias on the pair. Also, that means that y’all may therefore wanna prepare for both a topside and a downside breakout. Either way, the resulting rally or selloff from a breakout may have enough steam for a 190-pip move.
An upside breakout needs to clear 0.8530 on strong momentum, though. Meanwhile, a downside breakout needs to break past 0.8340 before the breakout is validated.
Looking at our technical indicators, they currently seem to favor a downside breakout, though. Stochastic, for one, is already signaling overbought conditions and all that. Meanwhile, them moving averages just recently just crossed-over into downtrend mode, with the 200 apparently acting as dynamic resistance for now.
GBP/CAD’s bullish momentum slowly lost steam when the pair encountered resistance at 1.7770. And recently, the bears appear to have gained an edge against them bulls, given that a fresh descending channel has just formed on GBP/CAD’s 1-hour chart.
As I always say, one of the more conservative ways to play a descending channel is to look for opportunities to go short when the pair is a the channel’s resistance area. Unfortunately, the pair is currently at the channel’s support area, so more conservative traders out there may wanna sit this one out.
But for the more gangsta traders out there who are planning to go long, just note that stochastic is just about to enter oversold territory. Bulls may therefore start charging in soon.
However, if bears break past 1.7650 on strong momentum, then they’ll likely gun for 1.7420 next. In any case, just make sure to remember to practice proper risk management, a’ight?
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