Rising Wedge Suggesting Correction
Validations
Multi-month Rising Wedge suggests to be at its end (almost two typical day bars high).
Note that the previous drop was determined and vigorous, in clear contrast to the to following 3 months.
Under theses circunstances, this pattern often precedes a downtrend move.
Central Banks appears to be on different path - US counterpart possibly rising rates in Q4.
China slowdown perhaps extending longer.
Invalidations
Resolution to the upside, where April high at 0.7835 could be tested.
Some US economic data being not so good, contrary to current resilience
Persistent hesitations from FED.
Levesl to watch for short to medium term trading
Level 1 @ 0.7425, Level 2 @ 0.7325, Level 3 @ 0.7165
Dear traders, have a nice weekend !
Multi-month Rising Wedge suggests to be at its end (almost two typical day bars high).
Note that the previous drop was determined and vigorous, in clear contrast to the to following 3 months.
Under theses circunstances, this pattern often precedes a downtrend move.
Central Banks appears to be on different path - US counterpart possibly rising rates in Q4.
China slowdown perhaps extending longer.
Invalidations
Resolution to the upside, where April high at 0.7835 could be tested.
Some US economic data being not so good, contrary to current resilience
Persistent hesitations from FED.
Levesl to watch for short to medium term trading
Level 1 @ 0.7425, Level 2 @ 0.7325, Level 3 @ 0.7165
Dear traders, have a nice weekend !
Comentarios:
After testing upper trend line and briefly broken it, rate were very close to Level 1 target. For us, the chances are for a rate hike at end of Q4. Level 3 could be reached some time before, following a traditional 'sell the rumor' mode.