On the daily chart of the British Pound vs the US Dollar (GBPUSD) pair, we’re looking at a breakout out of a major descending channel. Price has been on a downtrend for one year and 7 months. Eventually, bulls took over and took price higher breaking out of the descending channel. Sentiment changed from bearish to bullish after the breakout. As the rally continued, price fell into another consolidation forming a bullish flag. A combination of a steep uptrend and a descending channel.
Price action gives us reason to believe that the price is on its way higher, especially if the price breaks out of the bullish flag, ensuing the uptrend. We stay put and wait for price action to direct our next move.
On the Euro vs the Japanese Yen (EURJPY) the daily chart brings us to the realization of a pattern within a pattern. After a downtrend that lasted 1 year 9 months, the market bottomed forming a double bottom and a rally followed within an ascending channel. The double bottom broke out above last month, price came back to test the neckline and was successfully supported. This is another good example of trading confluence where two patterns are working out together to give us the same bias.
It is safe to say that price action suggests the pair is being controlled by bulls at the moment. Since price is trading within a rising channel, we wait to see whether the uptrend will possibly get to our near term level.
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.