FOREX Chart Of The Day: EURGBP Flag Pattern
Do you trade flag patterns in the #forex market?
#EURGBP has formed the pattern on the 4hr timeframe after hitting key support.
Will the pattern complete?
Watch the video to learn more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
Practice trading with a demo account
In this video, we’re going to have a little look at EUR/GBP as this was our Blueberry Jam trade to watch out for. It hasn’t triggered, but the market’s still in a decent area.
What we’re looking at this weekly time frame was that the price came back into those previous structure lows here and bounced straight off of it, closing back within the previous week’s range. Now, typically, when the market does this, it leads to some kind of impulse.
We can see if I just drag that a little bit higher and just to the left of all that interaction with this zone, throughout the few years here, we can see that the markets tend to gravitate towards this area and react in some type of way.
So, now we’re going to the daily time frame, the next thing I noticed was the lack of sellers. So, the two candlesticks that we see here suggest that the sellers aren’t really active in the market at this point. Typically, what we’d be looking for if the downtrend was continuing are the sellers to be active on these pullbacks. So if we see a pullback, we see a large bearish candlestick lock-in here and a large bearish interaction, whereas the market is just kind of stalling at this point. We’ve got candlesticks just closing within each other’s ranges. Again, it’s a sign that the market is consolidating. So, if I was to go to that four-hour time frame, what you would see is a consolidation pattern. If I just go to that, we can see that the price has pressed into the level, almost formed a double bottom pattern or some type of break of the lows, through there. We’ve rallied, and now the market is just compressing in this triangle shape of this channel.
So, it looks to me like a little bit of a flag pattern is going on here in this four-hour time frame, and we can see that the market isn’t really making any forcible lower lows at the moment. We’ve just got this, and the last time that we touched this previous low, we reacted to it. If the price obviously breaks lower, then we might be coming back and retest this structure point, just through here, before seeing that upside. But what I was anticipating was the breakout of this channel, just through there.
So, let’s see how this one plays out. If we do get that breakout, I’ll be looking for further long opportunities. If not, we’ll just cancel the position and look to see how the price reacts at this support zone.
So, keep an eye on this EUR/GBP potential flag pattern forming. Let’s see if the market breaks to the upside.
Thanks for watching. I’ll speak to you soon.
We hope our forex chart of the day analysis helps you in your trades. Practice trading the EUR/GBP pair with free $50,000 funding when you sign up for a free demo account at Blueberry Markets.