If you’re lookin’ for short-term chart patterns on the pound, then I’ve got your fix ‘coz I found a channel on GBP/NZD and a triangle on GBP/CHF.
GBP/NZD has been trending higher for some time now. And if we connect the most recent peaks and troughs, we can see that a fresh ascending channel has forming for us to play with.
And as y’all can see on that there chart, the pair is currently pulling back to test the channel’s support, which should be close to the 1.9250 minor psychological level.
Also, if the pair does test 1.9250, then the 100 may potentially act as dynamic support. Y’all may therefore wanna get ready to start lookin’ for opportunities to go long.
Stochastic is just about to signal oversold conditions, though, so there’s a risk that the pair may start moving higher without testing 1.9250. Going long without waiting for a test of support is extra risky, though, so only do so if you think you’re gangsta enough.
And as always, there’s always a slim chance that a downside channel breakout may occur. A downside break ain’t validated until the pair smashes lower past 1.9160, though.
Bears have been trying to push GBP/CHF lower but bulls have apparently entrenched themselves at the area of interest at 1.3070. And in the process, a descending triangle pattern has apparently formed.
As the name implies, a descending triangle is a bearish chart pattern. We are therefore waiting to go short if the pair breaks lower past 1.3070, ideally on strong bearish momentum.
And if downside breakout does occur, then the pair will likely have enough steam for a 100-pip move, based on the height of the triangle.
However, there’s always a risk that the pair may break to the topside instead. And if that happens, then a move higher past 1.3170 would be an early sign that bulls are taking over.
A topside breakout doesn’t seem likely at the moment, according to our technical indicators, though. After all, stochastic is pointing back down again without reaching overbought territory, which implies that bearish interest is strong. Also, our moving averages are still in downtrend mode.
Anyhow, just make sure y’all practice proper risk management as always, a’ight?