Who’s up to trade reversals today?
I’ve spotted a couple of double top formations on the 4-hour charts of GBP/AUD and EUR/JPY.
Check ’em while they’re hot!
This pair might be done with its rally, as it made a couple of failed attempts to bust through the ceiling at 144.00.
EUR/JPY is now inching close to the double top neckline around the 138.00, and a break below support could confirm a reversal.
What are the odds of that happening?
Technical indicators are giving mixed signals for now, as Stochastic is dipping into the oversold territory while the moving averages appear to be bracing for a bearish crossover.
If that pushes through, it could be a green light for more sellers to join in and sustain a downtrend that’s the same height as the chart pattern. That’s roughly 600 pips yo!
On the other hand, a return in bullish pressure might mean another bounce off support, followed by a rally back to the 144.00 resistance.
Better keep your eyes peeled for reversal or breakout candlesticks then!
Now here’s a short-term double top pattern within a long-term range!
GBP/CAD has been pacing back and forth between support around 1.7315 and resistance at 1.7820. The top of the range held as a ceiling on the latest test, and we’re getting more confirmation that a selloff is due.
Price has yet to close below the neckline around 1.7600 to set off a drop that might last until the bottom of the range.
If support holds, however, GBP/AUD could climb back up to the range resistance or even attempt a break higher. After all, the 100 SMA is above the 200 SMA to reflect bullish pressure, and the moving averages are currently holding as dynamic support.
At the same time, Stochastic is edging closer to the oversold region to suggest that sellers need a break. Turning higher would signal that buyers are ready to take over and keep the pair afloat.