Daily Forex Update: GBP/USD |
By, James A. Hyerczyk
After a short-period of sideways trading action buyers took over, driving the GBP/USD through the downtrending resistance line of a triangle chart pattern on the 240-minute chart. The size of the candlestick on the breakout was relatively large enough to suggest the presence of a strong buyer.
The overall quality rating is an average 5-bars. The initial trend which measures the strength of the trend prior to the chart formation is a low 2-bars. The uniformity indicator measures the number of successful tests of support and resistance as well as the presence of equidistant tops and bottoms. This indicator is rated average. The clarity rating is a solid 6-bars. It looks for “market spikes” and “trading gaps” which can disrupt the flow of the chart pattern. A rating greater than 5 puts it in the above average category.
The triangle chart pattern is a non-trending pattern. The key characteristic is the gradual narrowing of the support and resistance lines. The tighter these lines become the more compressed the trading action. Although it becomes tougher to trade a low-volatility, sideways market, the pay-off usually comes when the market breaks out. Autochartist has tagged the current breakout with a strength of 2 rating. Even though the candlestick was relatively large, most of the body was inside the chart pattern. This means it is going to take an increase in momentum to drive the market into the Autochartist target zone at 1.5824 to 1.6036.
About the author: Autochartist
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