Got a couple of chart formations and a potential trend play on my radar this week. Which one might be my best bet?
Reversal alert! Guppy looks ready for a slide as it forms a double top pattern on its 4-hour time frame. Price has yet to test the neckline and break below it to confirm a potential downtrend.
If that happens, the pair could fall by a little over 500 pips, which is roughly the same height as the chart formation. Stochastic is already dipping into the oversold region, though, so sellers might be having some second thoughts.
Now here’s a simple ascending triangle pattern for y’all! EUR/JPY is already testing the triangle support and might be due for a bounce back up to the resistance at the 133.00 major psychological mark.
However, stochastic appears to be southbound after recently hitting the overbought zone. A break below the triangle support around the 128.00 mark could set off a slide that’s the same height as the chart formation, which spans roughly 900 pips.
Lastly here’s one for the trend traders out there! GBP/CAD just broke through the mid-channel area of interest and may be due for a test of the ascending channel bottom seen on the 4-hour chart.
Stochastic is already indicating oversold conditions, which means that sellers are exhausted and could let buyers take over soon. If the channel support holds, the pair might make its way back to the 1.7000 area of interest or the top of the channel at 1.7250.
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.