The chart pattern fiesta ain’t over yet ‘coz I’m serving up a couple of short-term triangles on AUD/USD and GBP/USD in today’s intraday charts update.
First up is that there symmetrical triangle on GBP/USD’s 1-hour chart. Well, the triangle ain’t really symmetrical, so “symmetrical-ish” would probably be a more accurate description.
Anyhow, a symmetrical-ish triangle means that bulls and bears are fighting it out, but neither side has an advantage. This means that the pair is just as likely to break to the upside as it is to the downside. As such, we don’t have a strong directional bias on the pair.
However, if a breakout does occur, then the resulting rally or sell-off will likely have enough steam for a whopping 500-pip move, based on the height of the chart pattern.
Just note that an upside breakout needs to take out 1.4330, ideally on strong bullish momentum. A downside move, meanwhile, needs to smash lower past 1.3930 before the breakout is validated.
A triangle has also formed on USD/CHF’s 1-hour chart. This one is a descending triangle, though. And as it says on the tin, a descending triangle is a bearish chart pattern, so we’re mainly bearish on the pair. And all the more so, given that them moving averages are still in downtrend mode.
Today’s play is therefore to wait for a clear downside break past 0.9310, with the expectation that the breakout move will have momentum for a 130-pip run.
Do note, however, that there’s always a chance that the pair may break to the topside instead. Y’all should therefore plan ahead for that, especially if the pair takes out both 0.9440 and 0.9470 since that would validate the upside breakout.
In any case, just make sure to practice proper risk management as always, a’ight?