Last week I analysed the British Pound in pair with the American dollar (GBP/USD) and the Japanese yen (GBP/JPY). In both analyses, I discussed Price Action formation – Inside Bar. The direction of the breakout from this formation in both cases indicated a further deepening of the current declines. In line with my expectations, the market turned out to be moving towards the expected levels…
In Monday’s analysis: “GBPUSD – British pound under supply pressure” I wrote: “Today’s daily candle has a fairly large upper wick which suggests that this breakout may turn out to be effective and the quotations during the next sessions will also be heading south. Looking at chart H4, the aforementioned zone (1.2900) seems to be an even more likely target for sellers. A good place to take a Sell position is the bottom edge of the Inside Bar at level 1.2990 if there is an upward correction in this direction.”
A look at the graph above confirms that the analysis is consistent with what the market has done this week, and the planned level has been broken and the price has fallen from Monday 260p.
In Wednesday’s analysis: “GBPJPY – price breaks out of the Inside Bar suggests drops”, I pointed out on the Daily chart the false breaking out of the triangle, and when analyzing the H4 chart, I wrote so: “The Monday and Tuesday daily candles formed the Inside Bar pattern from which a break down has already occurred today. When you look at chart H4, you will notice that after a breakout from the IB the price went back to the broken bottom limit (141.20) of the Inside Bar and after the re-test, it moves down again. In this situation, we may consider opening Sell orders with TP in the vicinity of the nearest demand zone 139.40 and Stop Loss above 141.20”.
On the attached comparison chart we can see that the price covered a distance of 120p and almost reached the mentioned level, to which only 10p was missing.
Next week I will post as usual 2 analyses and on weekend make a summary of how they worked.