Looking at the monthly time frame of The British Pound vs The Canadian Dollar (GBPCAD) we can see a descending channel that has been present for the past 2 years. Bears and bulls have been playing tug of war as they consecutively take charge of the market in turns. Our attention at this point is December’s candlestick that closed last week, which formed a gravestone doji.
A gravestone doji is an indication that buyers pushed the price up but were unable to sustain the rally. The uptrend could be highly likely losing its momentum. Are we going to see a new downtrend? Keep in mind that the main trend is a downtrend as we are in a descending channel. You may look at lower time frames such as the weekly and daily for entry confirmations.
On the weekly chart of The Australian Dollar vs The Japanese Yen there’s an ascending wedge that has formed within a downtrend. A rising wedge within a downtrend is usually a potential continuation pattern. This week’s candle gapped down and opened below the support level of the rising wedge.
There’s a high chance of bears coming in and causing prices to fall. However, before that price could re test the support to see whether it’ll hold as a resistance zone as well. Price confirmation is key and you may open a lower timeframe such as the daily timeframe to scout for bearish opportunities.
Disclaimer: This analysis is for educational and general information only and not advice or a recommendation to trade or invest. Do your own research/analysis and don’t blindly enter trades based on the analysis.