New month, new set of setups! I’m serving up a pound special for y’all this time, with my one good eye focused on these three neat chart patterns.
First up is this EUR/GBP head and shoulders classic reversal pattern on the 4-hour time frame. This pair seems to have broken below an earlier H&S pattern already (Can you spot it?) but has formed a new one with a downward tilted neckline.
A candle closing below the .8860 area could be enough to confirm a downside break, setting off a slide that’s around 250 pips tall or the same height as the reversal formation. However, stochastic is just pulling out of the oversold region to signal that support might hold as buyers return.
Can’t get enough of ’em reversal patterns? Here’s another one! Pound bears failed in their last couple of attempts to take GBP/CHF below the 1.2500 handle, creating a double bottom on its 4-hour time frame.
Price is currently testing the neckline and a break past the 1.2800 major psychological level could confirm that an uptrend is in the works. This could last by the same height as the double bottom, which spans roughly 250 pips.
Stochastic is heading south, though, so the pair might follow suit while sellers have the upper hand.
Lastly, I’ve got this long-term rising wedge setup visible on the daily time frame of GBP/NZD. The pair just recently got rejected on its test of resistance and might be due for a pullback to the bottom.
Stochastic is heading lower after all, reflecting the presence of selling pressure. Using the handy-dandy Fib tool on the latest swing low and high shows that the 61.8% level is closest to support near the 1.9450-1.9500 zone and is just above the wedge support, so buyers might be waiting there.
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