GBPJPY- Rising Wedge Formed: Educational Analysis
HI Everyone,
For the last week, GBPJPY has been consolidating in a rising wedge pattern. As we are aware from fundamentals, a rising wedge pattern is a bearish chart formation which can indicate both reversal and continuation patterns – depending on location and trend bias. In this case a continuation as the market has been bearish already.
Continuation Pattern:
1. Establish downtrend
2. Rising wedge consolidation formation
3. Linking higher highs and lower lows using a trend line assembling towards a narrowing point
4. Confirm divergence between price and volume using volume function - MACD may also be used
5. Overbought signal can be confirmed by other technical tools like oscillators
6. Look for break below support for short entry
When market does break, price will drop to 154.109 area, before going back to retest and then continue to levels of 153.319 where we will approach the centre trendline. If we get a break here then we can see price go low as 151.548
For the last week, GBPJPY has been consolidating in a rising wedge pattern. As we are aware from fundamentals, a rising wedge pattern is a bearish chart formation which can indicate both reversal and continuation patterns – depending on location and trend bias. In this case a continuation as the market has been bearish already.
Continuation Pattern:
1. Establish downtrend
2. Rising wedge consolidation formation
3. Linking higher highs and lower lows using a trend line assembling towards a narrowing point
4. Confirm divergence between price and volume using volume function - MACD may also be used
5. Overbought signal can be confirmed by other technical tools like oscillators
6. Look for break below support for short entry
When market does break, price will drop to 154.109 area, before going back to retest and then continue to levels of 153.319 where we will approach the centre trendline. If we get a break here then we can see price go low as 151.548