With over 600pips in our direction since my last publication on this pair (see link below for reference purposes); The price hit a peak around AU$1.85000 in June 2021 and has since then continued to find lower lows. The appearance of a Double Top structure on the chart is a very strong clue that hints at a reversal momentum building as we experience a significant Breakdown of Key level I @ AU$1.84100 during the course of last week trading session.
In the UK, the newly appointed Health Secretary Sajid Javid insisted that the reopening remains intact, showing confidence about returning to normal. However, as cases continue rising – and hospitalizations are inching higher – market participants tend to cast doubt over loosening of restrictions on July 19 which might have a negative impact if not indecision on the Pound in the coming week(s).
Tendency: Downtrend (Bearish) Structure: Breakdown | Supply & Demand | Channel | Reversal pattern (Double Top & Triple Top) Observation: i. It has been a Bullish run for the Pound since the beginning of the year - 2021 hereby hitting a peak @ AU$1.85000 which is followed by a lower high to transition into a Descending Channel. ii. The inability of price to touch and surpass the previous high (AU$1.85000) increases doubt on a further rally as a Double Top pattern emerges on the chart. iii. Double Top: We do have an extremely bearish technical reversal pattern in play after the price reached a peak two consecutive times (AU$1.85000 & AU$1.84800 respectively) with a moderate decline between the two highs. iv. Even as we await a confirmation which will happen if the price falls below the support level @ AU$1.82700 (Neckline of Double Top) that equals the low between the two prior highs; there is an evident structure that occurred between 30th June & 2nd July 2021 which is characterized by multiple rejections of AU$1.84600 (Triple Top) that signals Bearish tendency in the coming week(s). v. TRIPLE TOP: formation of three peaks moving into the same zone @ AU$1.84600, with pullbacks in between can be considered complete immediately the price broke down pattern support @ AU$1.84000 on the 2nd of July 2021, indicating a further price slide in the coming week(s). vi. The early hours/days of the new week might see a price climb to test the Neckline of Triple Top @ AU$1.84000 to incite further decline. vii. If a climb happens, I have identified a niche around AU$1.83900/1.84400 for selling opportunities. viii. A plunge below Key level II @ $1.83500 (Breakdown/Retest) might welcome an addition to the existing position and a further plunge below AU$1.82700 welcomes another addition... Trade consciously! :) Trading plan: SELL confirmation with a minimum potential profit of 150 pips. Risk/Reward: 1:6 Potential Duration: 3 to 7days
NB: This speculation might be considered to make individual decisions on the lower timeframe.
Watch this space for updates as price action is been monitored.
Risk Disclaimer: Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility. You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment. I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith. Past performance is not necessarily indicative of future results.
Good analysis… few points to consider though..
Have you factored in the relative weakness in Australian Dollar ? Even if the sterling have more troubles building up and may appear weakening will the Australian Dollar be strong enough to push it down ?
So far the impulse to move higher seems to be limited by the relative weaknesses in the sterling due to
-Covid-19 issues
-Brexit
-and perhaps UK politics.
Australia on the other hand continues to be troubled by
-Covid-19 issues
-and tension with China
Just wonder if it will eventually be strong enough to bring it back to 1.79 level
darcsherry
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@magix128, Very sensitive observations you have raised here. In addition to all of these said and mentioned, I have always considered the deciphering of price action a significant basis for every bias published.
It is pertinent to also state that condition for selling appears to remain valid as long as the price remains below the key levels stated therein, let's see how it plays out this week.
Thank you for your contribution... I am indeed grateful
Have you factored in the relative weakness in Australian Dollar ? Even if the sterling have more troubles building up and may appear weakening will the Australian Dollar be strong enough to push it down ?
So far the impulse to move higher seems to be limited by the relative weaknesses in the sterling due to
-Covid-19 issues
-Brexit
-and perhaps UK politics.
Australia on the other hand continues to be troubled by
-Covid-19 issues
-and tension with China
Just wonder if it will eventually be strong enough to bring it back to 1.79 level