Saturday, April 21, 2018

GBP/JPY Broke Out Below The Support Trend Line Of The Pennant

There has been a breakout below the pennant that has been developing for a year and a half and there are even opportunities to open short positions from better levels.

As it often happens after a breakout below or above a trend line of different figures (a pennant, a flag, a wedge, etc.)  the price recovers not only to test the breakout but climbs deeper within the figure, after which it heads toward the limit of said figure, which is the height of the figure from its base to the first level at which the instrument reached the opposite trend line.

As we all know, usually the limit of these instruments is reached indeed. 

In this case said limit is over 2400 pips starting from the breakout level (at  148.123). If the pair reaches the limit it will drop to 124.00 or even lower.

That is, of course, with the caveat that this is a downward trend where one could find countless other entries for positions.