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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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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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3 thoughts on “EURGBP prints continuation pattern on monthly chart; finds support”

  1. Daniel Ku Guet Liang says:

    Thanks for sharing your insight. May I also please ask if the daily chart also qualify as cup & handler pattern? which mean failing any buy setup in LTF & if price close above 17Jul price, I can jump in? Thanks for your thought.

    1. Daniel Ku Guet Liang says:
  2. Soh Tiong Hum says:

    Hi Daniel, the chart pattern in the daily chart qualifies as cup and handle. You need to take note of two resistance levels. 1) Draw slightly downward sloping trendline connecting the tops. 2) Horizontal level based on the topmost point. Cup and Handle is confirmed when 1) is broken upwards. Cup and Handle Pattern is also a Continuation Pattern.

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