Daily Technical Update April 13, 2010
GBP/JPY: Fractal Double Tops
- Daily: The daily chart shows the market possibly developing a double top after testing the 144.00, 61.8% retracement level. We see that the mode has been bearish by the relative positions of the SMA50 and SMA 200.
- A conservative projection can be the 138.50/139.0 area.
- 4H: We can see If the market breaks below 141.0, the double top is confirmed.
- But let's see if we can anticipate this move as it appears the a fractal double top has been completed to form the right top.
- In fact, this minor double top is also seeing a pullback. If the market starts to decline, we have completely validated the fractal minor top, and this gives us a good clue that the market is probably going to be bearish, based on the fact that bullish attempts have exhausted.
- Note the loss of momentum reflected by the RSI during the second top. It basically stayed below 63 (60 is a typical bearish range resistance in RSI).
- The bearish outlook however, should be kept to the short-term until the market can break below 138.50.
- 1H: The 1H time-frame shows the fractal (minor) double top in more detail. We see a possible near-term swing projection to 141.30 in the upcoming Asian-European session.
- If the market continues to decline, then we can anticipate the decline to be supported at 138.50. A break below that brings intermediate bearish outlook.
Commodity Trading Advisor