GBP/USD in double top, trading short USD/JPY and WTI, trading long on the DJIA [Video]
|I’m Brad Alexander and in today’s Market Blast, let’s take a look at the DJIA (US30), WTI (USOil), USDJPY and GBPUSD.
As you know, the double top is a bearish reversal pattern and we don’t want to open a short position until price action breaks this neckline.
Once that happens, we can often expect price to fall to the previous low.
You will note that something similar happened last month with price action breaking the neckline here.
We also need to confirm that GBP is a weak currency by looking at all the other GBP pairs and, in fact, we can confirm that on the charts.
As well, yesterday’s UK inflation figures were lower than expected which indicates a lower value of any currency.
Of course, we will need to see a bit of strength on the part of USD and we are seeing a bit today but overall the currency is weak after Jerome Powell’s comments last week.
Also, watch out today and tomorrow for UK and US economic news which will likely drive price action.
We looked at JPY earlier and, if USD continues weaker, we see price action bouncing off this upper trend line on USDJPY,
MACD has been bearish for over one month and it looks like it will turn down again very soon.
As expected, the BoJ kept Interest Rates at -0.1% which sent JPY weaker but only temporarily and we hope you took advantage of the reversal.
Last weekend the price of WTI shot up based on the problems in the Red Sea.
We now may be looking at a reversal on the daily chart with price action bouncing off the upper trend line, the stochastic oscillator turning down from overbought, and a bearish candlestick pattern forming.
Yesterday we saw a huge fall in the US stock markets based on a huge volume of “Put Options”.
This may be a chance to buy the dip with price action at the lower trend line and the stochastic oscillator trying to turn up from oversold.
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