Yesterday, a major buy signal was triggered on the GBPUSD chart. Major, as it’s present on the D1 and W1 charts, so the setup is potentially worth hundreds of pips. Around 700 to be precise. The positive sentiment comes from the fact that the rate created an inverse head and shoulders pattern. The formation started in July and ended yesterday with the breakout of the neckline (red). The potential target for this movement is the long-term pink downwards trend line connecting highs from 2014 and 2018. With this kind of setup and the present momentum, the chances that we will get there are pretty high.
Next up is EURUSD, which is moving slowly but surely. Slowly, as momentum is really low and resembles a sideways trend. Surely, because despite this, we are able to make higher highs and lows. Tuesday was important here as the price broke the upper line of the rectangle pattern (yellow), which in theory, brings us a buy signal. Fed Chair Jerome Powell was a big help here as his testimony was perceived as dovish. That obviously helped to weaken USD. As for a target, we’re looking at the upper line of the descending triangle pattern. That can potentially give us around 50 pips, which may not be a lot, but it’s definitely enough for mid-term traders.