News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Weakness in equity markets continued last week as losses built and technical patterns hint further bearishness might be ahead. Get your #equities update from @PeterHanksFX here: https://t.co/GGVrB3r7if https://t.co/HPHUC8EG3o
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/q80wSAoxXP
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/7mc19Gxrvm
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/09/26/Gold-Price-Outlook-Rising-US-Dollar-Sinks-XAUUSD-Will-Losses-Extend.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/gPhy0KoW3W
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDnpPbn https://t.co/Xtk5g4JQEB
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/3Wked6GBOp https://t.co/SsUguHB39W
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/aD1ZWhTWZp
  • The price of #oil may continue to trade in a narrow range as the rebound from the September low ($36.13) appears to have stalled ahead of the month high ($43.43). Get your #commodities update from @DavidJSong here: https://t.co/719LgjFmYG https://t.co/SSoqjONUzA
  • The Australian Dollar may extend its slide lower despite the planned easing of Covid-19 restrictions, as the market continues to price in an RBA rate cut on October 6. Get your #currencies update from @DanielGMoss here: https://t.co/HJpngnerzY https://t.co/g6X8ABQDwY
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your USD/INR market update here:https://t.co/ed4QR7QQOn https://t.co/gDWYNtm2UY
How to Trade the GBPUSD Symmetrical Triangle Pattern

How to Trade the GBPUSD Symmetrical Triangle Pattern

2014-03-18 19:00:00
Gregory McLeod, Currency Analyst
Share:

Talking Points:

  • Symmetrical triangles form when buying and selling pressure is at equilibrium
  • Forex symmetrical triangles usually precede a major price move
  • GBPUSD is currently trading within a symmetrical triangle and is poised to breakout

Since reaching a high of 1.6821 on February 17th 2014, GBPUSD has traded in a range that has been narrowing. Lower swing highs and higher swing lows compressing form a symmetrical triangle. Neither GBPUSD buyers nor sellers can gain an upper hand. Usually, a breakout happens a third of the way within the triangle.

Usually, a triangle occurs when there is a big fundamental news item that is around the corner. Tuesday’s Consumer Price Index (CPI) and the FOMC U.S. interest rate decision could be the catalyst needed to break GBPUSD out of its symmetrical triangle. These announcements could give either the bulls or bears the confidence they need to take control and move price in their respective directions

Learn Forex: GBPUSD Daily Chart Symmetrical Triangle

How-to-Trade-the-GBPUSD-Symmetrical-Triangle-Pattern_body_Picture_1.png, How to Trade the GBPUSD Symmetrical Triangle Pattern

Created with Marketscope 2.0

Take a look at the daily GBPUSD daily chart above. Notice that any price advance has been capped by a trend line created by the two yellow-circled swing points. In addition, any price decline has been halted by a support by a rising trend line established by two yellow-circled swing points. The latest candles is a doji which highlights the indecision of the pattern itself.

A breakout strategy is one most used to trade the symmetrical triangle pattern, although some traders may attempt to trade within the triangle buying at support and selling at resistance. In a breakout strategy, traders will wait until price moves above resistance before entering long or waiting until price moves below support to enter short.

In the GBPUSD symmetrical triangle above, buyers will want to see price close above 1.6672 before entering. Next, a protective stop can be placed a few pips below the last swing low near 1.6579. By measuring the height of the triangle, we get 216 pips. A price target can be projected at 1.6888.

On the other hand, a close below 1.6570 would be a sign for bears to jump in short. Projecting the height of the triangle of 216 pips down from the swing low we get a price target at 1.6394. If we get a bearish close below symmetrical triangle support, we would look to place a protective stop just above the pattern near 1.6672.

Symmetrical triangles can provide excellent trade setups with a well-defined risk to reward. Triangles may not be able to tell traders a specific direction of a breakout, however, they can give traders an indication of how far a move can travel.

---Written by Gregory McLeod Trading Instructor

To contact Gregory McLeod, email gmcleod@dailyfx.com.

To be added to Greg’s e-mail distribution list, please click here.

Follow me on Twitter @gregmcleodtradr.

This article showed you to trade a GBPUSD triangle breakout. I want to invite you to enroll in our free Fibonacci Retracement Course to find other types of support and resistance. Sign our Guestbook to gain access to this course. You will automatically have universal access to other courses.

Watch Greg McLeod at 9:30 ET in the DailyFX+ Live Classroom

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES