AMMT

GBPUSD, rising wedge meaning down down?

FX:GBPJPY   British Pound/Japanese Yen
175 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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