GBP/USD & AUD/JPY Chart Patterns Developing, Could Soon Present Opportunities
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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)
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)
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.