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GBP/USD ascending wedge developing
GBP/USD is in the process of building an ascending wedge, with the reversal this morning off the intra-month trend-line seen as forging out the next higher low in the sequence. It will take a little more time for a matured formation, but given its size it needs to confirm in the next couple of days.
The trend-line from April has already been surpassed, while another from July lies towards the top of the wedge. A breakout above the top-side of the wedge will have both trend-lines in the rear-view mirror and higher prices likely in store. The low from July will need to be broken, but with cable coming out of oversold conditions and having pent-up pressure (ascending wedge) it may only prove to be a minor obstacle.
Confirmation comes on a break above 12936, with a measured move target (based on height of wedge) of 13060 up to 13150, a trend-line from June. Stops should be placed sufficiently back inside the wedge down near 12900.
GBP/USD 4-hr chart (Ascending wedge potential)
Check out the broader view for GBP in the Quarterly Pound Forecast
AUD/JPY turned off trend-line, building a bear-flag
AUD/JPY turned down aggressively this morning from the trend-line off the July peak and the low from last month. This keeps the developing bear-flag in play. A break of the underside trend-line counts as validation and with that look for renewed weakness. The initial target is sub-80, the monthly low, with potential for even more on a break of support. Stops should be set sufficiently above the lower parallel once broken.
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AUD/JPY 4-hr Chart (Building a Bear-flag)
***Updates will be provided on these ideas and others in the trading/technical outlook webinars held on Wednesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday’s for the Becoming a Better Trader webinar series.
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---Written by Paul Robinson, Market Analyst
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