AMMT

GBPUSD, rising wedge meaning down down?

FX:GBPJPY   British Pound/Japanese Yen
173 0 2
On the weekly chart, the GBPJPY             pair has penetrated the long-term Guppy GMMA, which now has initiated the convergence towards compressions of the EMAs. Going to the daily time frame, the long-term GMMMA has already turned bearish and the price has retested the GMMA, forming and evident rising wedge, a bearish pattern . However, it is interesting to notice, that going down to the 4H time frame, it is possible to identify an inverted head and shoulders , a bullish pattern , but price retraced back below the neck line after bouncing on the upper line of the rising wedge. Therefore, taking all of this in to account due to the bearish rising wedge and the bearish signs from the GMMA both on the daily and weekly timeframes, a downhill move of GBPJPY             is more likely. But just in case, lets identify two different scenarios.


  • Scenario 1:

    Short @ 185.95, at break of the rising wedge and only if the price closes below it
    Stoploss 187.15
    Target 1 @ 183.16, 50% distance from break point to the base of the rising wedge
    Target 2 @ 181.70 , near 76.4% distance from break point to the base of the rising wedge
    Target 3 @ 180.36-180.58, 100% distance from break point to the base of the rising wedge and coincides with a long-term support/resistance 180.55-180.60. I expect the price not to go further down than the base of the wedge, without retracing to some higher level, maybe to 184.29 level, then retest the 180.55-180.60 and maybe break it

  • Scenario 2:

    (pink arrows)
    Bullish @ 185.95, if price fails to break rising wedge lower line
    Stoploss around 185.22
    Target 1 @ 188.80, price fails to break upper line of the wedge and reverses.


  • Scenario 3 :

    (black arrows)
    Bullish @ 185.95 if price breaks upwards the inverted head and shoulders again
    Stoploss around 185.22
    Target 1 @ 188.34, 23.6% distance from head to shoulders and coinciding with the upper line of the rising wedge
    Target 2 @ 190.13, 23.6% distance from head to shoulders
    Target 3 @ 191.92, 23.6% distance from head to shoulders
    Target 4 @ 193.03 - 193.52, corresponding to long-term support/resistance level and 100% distance distance from head to shoulders, respectively


All trades are managed with count back line stoploss after triggered.
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