Yo! The chart pattern party ain’t over yet! This time, I’ve got a triangle on GBP/CHF and a channel on GBP/USD. Check ’em out!
GBP/CHF has been trading sideways while apparently trapped inside that there fresh symmetrical triangle, which also looks like bearish pennant if we also take into account the downtrend before the pair began consolidating.
If what we’re lookin’ at is a pennant, then our main directional bias is to the downside. And we’re waiting for a clear break past 1.2990, with the expectation that the resulting selloff will likely have enough momentum for a 250-pip move.
But if that there is a symmetrical triangle, then we still have the same downside expectations. After all, stochastic is already in overbought territory while them moving averages are still in downtrend mode.
However, a symmetrical triangle also has a chance of breaking to the upside, so it may be prudent to prepare for an upside scenario, especially if the pair takes out 1.3070, since that would validate the topside break.
If trading breakout ain’t your thing, then you may wanna check out that there descending channel pattern on GBP/USD’s 1-hour chart.
Okay, gonna keep it real with y’all. That there descending channel ain’t validated yet since the pair has to make its way down to the channel’s support.
However, if we apply our handy Fibonacci tool, we can see that the would-be channel’s resistance lines up with the 61.8% retracement level, which also happens to sit right smack on the area of interest at 1.3150.
There’s therefore a higher-than-average chance that resistance may hold. And all the more so, given that the 200 appears to be acting as dynamic resistance and stochastic is already signaling overbought conditions and all that.
But again, the would-be channel hasn’t been confirmed yet, so do be extra careful if you do plan to look for opportunities to go short.
As usual, y’all just make sure to practice proper risk management, a’ight? Also, do note that if 1.3150 fails to hold as resistance, then a move higher past 1.3210 would be an early sign that bulls are taking over. The pair would still need to clear 1.3290 in order to signal a potential trend change, though.