EURGBP prints continuation pattern on monthly chart; finds support

EURGBP shows flag-like continuation pattern on Monthly Chart

Flag or pennant-like chart patterns are trend continuation patterns. They consists of two key features: a ‘flagpole’ and a ‘flag’ or ‘pennant’. The flagpole represents the initial impulse and the flag represents a consolidation / retracement movement. Once the consolidation / retracement is over, price will erupt out of the flag and continue its previous movement. As we can see in this monthly chart of EURGBP, both features are prominent (see labels 1 and 2).

EURGBP monthly chart

EURGBP prints continuation pattern on monthly chart

 

July price action outside resistance

We can see from price action since beginning of 2013 that the pair is trading around its resistance trendline (red). With the end of July nearly here, we can see the whole monthly candle outside resistance (point 3). In addition, support can be found around 0.84 which is a multiple-year support resistance level (point 4, 5, 6). A successful move outside resistance could signal the start of the continuation move.

Closing back below resistance trendline is a negative development.

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.   Soh's Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX.   Disclaimer notice: "I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."
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  1. By Daniel Ku Guet Liang

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