What a week! First, we started with the gap on almost all instruments and then we got a very volatile reversal. Our first instrument is the EURUSD, where the initial gap was relatively small but what happened next is more important. Yesterday, the price broke the horizontal resistance created by the last week’s tops along with the upper line of the symmetric triangle. As we can see now, that is a false breakout pattern, which brings us a proper sell signal. Next target is on the lower line of the triangle.
DAX also has a false breakout pattern. Here, gap allowed to break the neckline of the iH&S pattern or the triple bottom formation, if You will. For the buy signal, the price needed to stay above that black support. They did not manage to do that, so that is a false breakout pattern and should result with a further weakness.
About the false breakouts… we need to mention the Gold now, where the price was trying to break the 38,2% Fibo again. For some time, we were even above but then, the price went back under that resistance. I guess you already know how important that level is. As long as we stay below, the sell signal is on.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
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