I measured this pattern last week already, but I was too skeptical that it would work due to all the news and BoE statements. Now however, it looks promising, but price must close above the 10SMA again, as well as close above the weekly pivot point to have a secure entry for a long position. Especially when trading this pair, extra caution and patience are valuable commodities.
Looking at the RSI (I use settings 66.66 and 33.33, as recommended by John Hayden in his book 'RSI: The Complete Guide') after breaking out from below the 33.33 level, the RSI never dipped below or even touched the 33.33 level, indicating bullish strength.
A look at the SMA's (10 in blue, 50 in magenta, and 200 in black) they reveal something interesting, too. The 10SMA is well above the level where price first closed above it and is leveled out at the time of writing, showing short term bullish pressure to resume. The 50SMA, however, is pointing downward quite sharply, but it too is higher than when price first closed above it on June 1st. Furthermore, if price closes above both the 10 & 50SMA this would confirm the bullish cross over of the two which occurred on June 4. Then above, of course, is the 200SMA and it is slowly starting to level out, indicating that bearish pressure is weakening, naturally, a close above it would be a very bullish signal.
Trade long (RvR ratio 2.06) Entry: Close above 10SMA and weekly pp at 145.80 S/L: 144.10 T/P 1: 147.22 T/P 2: 148.12 T/P 3: 149.31 As always, scale out your profits and adjust stop/loss to suit your personal risk management profile.
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