I posted details of a potential short sell set in GBP: USD on 4 June. This was based on a possible break to the downside of the long term triangle on the monthly chart.
As things currently stand, price has not taken out the low established on 1 June.
The zone of support around the triangle trend line is holding and the triangle setup has not triggered at this stage.
In fact, the daily chart looks distinctly like the early stages of a Bollinger Band W reversal buy set up. To view our video on this and other Bollinger Band techniques click here
The weekly chart below shows price testing the triangle support. The Bollinger Bands on this longer term reference chart are narrowing with the moving average in the middle flattening out. This is consistent with a trading range situation like the narrower part of this triangle
The weekly Bollinger Bands are also supporting a buy set up with the 1 June low pushing below the lower band. For good measure the fast stochastic looks as though it could be ready to trend up out of the overbought zone
On the daily chart below, I have zoomed in on the possible W reversal set up. The 1 June low was outside the lower band but it’s not hard to imagine that we could make a 2nd trend low above the band at some stage in the next few days.
In fact a close above Friday’s high (shown by the arrow) could trigger a setup tomorow morning.
Given the overall position of this triangle as a potential 4th swing in a 5 swing decline, this is a situation where a trader using the strategy approach outlined in our video would set a profit target at the triangle resistance line rather than running the uptrend without a fixed profit objective