Downtrending Patterns on the Intraday GBP/USD
The GBP/USD has formed two downtrending patterns on the shorter term intraday timeframes. The 15 and 30 minute charts have alerted a falling wedge and channel down pattern respectively.
Let's take a look at the 15 minute chart with the Continuation Falling Wedge.
The pattern shows the resistance currently holding the downtrend in place. However not only have prices begun to congregate above the 1.6350 psychological level, but the Initial Trend of the pattern alert indicates a weakening trend. The first set up to watch for will be an exhaustion play off the green downtrend line resistance. A pierce of this line would indicate a near term breakout.
Remember that 15 minute charts offer more frequent alerts and set ups, but reflect psychology that is most short term. The downtrend line is currently just below the 1.6400 level at 1.6395.
If prices happen to rally off the 1.6360 level where there has been very recent support, also keep an eye on the 60 minute Continuation Channel Down. The Initial Trend is extremely low and this indicates a much smaller chance of downside follow through or "continuation" of the current (down) trend.
The decision level on the 60 minute chart is waiting above the "00" of 1.6400 at 1.6428. All downtrend lines are dynamic, so with each new candle within the pattern, check for the new price at which the downtrend line is plotting. Again, first look for exhaustion, then the reversal. But, unlike the 15 minute which has the 1.6400 as a ceiling, the 60 minute chart would trigger a reversal above this level and there is more likely to be upward momentum if this happens. That bodes well for a potential 60 minute trend reversal and downtrend line break.
For further information, visit http://autochartist.com
Let's take a look at the 15 minute chart with the Continuation Falling Wedge.
The pattern shows the resistance currently holding the downtrend in place. However not only have prices begun to congregate above the 1.6350 psychological level, but the Initial Trend of the pattern alert indicates a weakening trend. The first set up to watch for will be an exhaustion play off the green downtrend line resistance. A pierce of this line would indicate a near term breakout.
Remember that 15 minute charts offer more frequent alerts and set ups, but reflect psychology that is most short term. The downtrend line is currently just below the 1.6400 level at 1.6395.
If prices happen to rally off the 1.6360 level where there has been very recent support, also keep an eye on the 60 minute Continuation Channel Down. The Initial Trend is extremely low and this indicates a much smaller chance of downside follow through or "continuation" of the current (down) trend.
The decision level on the 60 minute chart is waiting above the "00" of 1.6400 at 1.6428. All downtrend lines are dynamic, so with each new candle within the pattern, check for the new price at which the downtrend line is plotting. Again, first look for exhaustion, then the reversal. But, unlike the 15 minute which has the 1.6400 as a ceiling, the 60 minute chart would trigger a reversal above this level and there is more likely to be upward momentum if this happens. That bodes well for a potential 60 minute trend reversal and downtrend line break.
For further information, visit http://autochartist.com
- 29 July |
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