The Dow appears to be more ‘resisted’ than supported. A bullish situations hangs on the a few potential ‘ideas’ for support as well as the 200-day ema.

DJI faces many resistances; bearish reversal

GBPUSD prints likely continuation for short. This is despite it near to more resistance of March 2010 and mid-July 2010. This level might be a potential support.

GBPUSD display continuation for short

EURJPY prints a descending triangle or bearish pennant depending on how one looks at it. I see the shape of a shoe. Anyhow, the lower highs hint of a continuation move.

Descending triangle for EURJPY

So despite a bullish close in Week 32 for USDJPY, this week is just so negative. What’s worse, it just gets resisted lower and lower. 84.70 could be threatened.

Week 33 for USDJPY bearish despite good close in Week 32

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In my earlier post, we discussed higher bases for Euro on a week to week basis. A look at the current daily and 4-hour chart suggests that risk for a downward move has appeared.

Bearish pennant likely in EURUSD daily

Daily momentum suggests that a bearish pennant is likely. Despite the higer bases, no credible bullish reversal pattern has appeared.

Bearish pennant capped by potential double top; confluence support

On the 4-hour chart, a rising wedge capped by a potential double top has now appeared. It is this wedge that resembles the body of the bearish pennant.

Bulls might want to buy if confluence support holds. Big trend bears should do well to wait for a pullback. Any pullback not surpassing this week’s high will make the setup even more bearish when it starts to resemble a head-and-shoulder.

Stay tuned.

The Loonie (USDCAD) is on a downtrend since 2009 and it does not seems to have any attempt to reverse this trend as of now.

Weekly Chart of USDCAD

As from the Weekly Chart above, the Loonie is making its way near to 2009 support and it is also near to multi-week support zone now. Since late Sep 2009 till now, the Loonie has been on a trading range, which could be a consolidation of the downtrend.

How to take this advantage?

4 Hourly Chart of USDCAD

On the 4 hourly chart, it seems that Loonie is forming a pennant-like chart pattern, which could hint a possible trend continuation.

This pattern will be valid as long as the top trendline of the pennant is not violated.

On the other hand, a bullish view on the Loonie could regard the pennant-like pattern to be a symmetrical triangle for a counter-trend move.

Therefore, it will be better to wait for a clear picture for Loonie to unfold before attempt for a trade.

Pennant in upward channel

Pattern requires break of short blue trendline to confirm.

Today, we shall excite ourselves by looking at one of the most volatile currency pairs, GBP/JPY, which has a daily average fluctuation of about 300 pips.

In addition, we shall see how 3 chart patterns that is very evident on GBP/JPY for trend reversal and trend continuation – namely, rising wedge pattern, pennant and  symmetrical triangle pattern.

GBPJPY Weekly Chart with Chart Patterns

As shown on the chart above, the Bearish Trend Reversal started with the rising wedge formation, which later evolves into the famous Head and Shoulder pattern hinting towards a big bearish reversal move underway.

Afterwhich, every subsequent retracement of the downtrend has either a rising wedge pattern or a bear pennant pattern.

Thus, it goes to show that there is a high reliability of trend continuation when either patterns had formed.

As we observed the recent months, that there is a big rising wedge formation which seems to be forming since 2009, and a symmetrical triangle forming shortly.

As price draws nearer to the apex of the symmetrical triangle, a breakout is inevitable. Yet, will it be a another trend continuation or a bullish reversal?

Should it break out of the pattern to the bullish side, then more bullish sentiment will be added to the equation as many traders will be eyeing for trading the breakout.

Likewise for the breakout to the bearish side, whereby more shorts will be added too.

Whichever the breakout is to be, it will likely to be a big move, so it is worth keeping tabs with this volatile pair in the coming future.

The CADJPY displays a formation that looks remarkably like a pennant. This is because of the ‘flagpole’ which tells us the strong upward momentum in its previous rally. This flagpole and subsequent side-way movements suggests a continuation action after profit-takers have been cleared and strong bulls take command.

Possible pennant in CADJPY

On the other hand, price remains resisted by an August 2009 level so upside is restricted until this level is breached successful.

Equidistant channel in 4 hour chart of CADJPY

In the 4-hour chart, an equidistant channel can be seen. The resistance of this channel is the resistance of this possible pennant formation.