By Russell Glaser – The Cable’s long term bearish trend appears to be weakening. In the process, a double bottom reversal pattern may be forming on the daily chart.
As shown below in the forex technical analysis, the daily chart displays the long term trend line has been broken and a potential double bottom taking place.
This common reversal pattern has two points near the same price level and takes the shape of a W. The resistance line rests at the peak of the pattern at the price of 1.5380. This potential double bottom will be complete when the price breaks above this resistance level.
Traders need to be aware that this remains a potential double bottom until the resistance line is breached. This could simply be a consolidation pattern before a resumption of the long term downward sloping trend.
The future price move after a breach of the resistance level can be measured from the resistance line down to the bottom of the chart pattern. This would be a potential price move higher of approximately 600 pips. This would also signal a reversal of the long term downward trend and the beginning of a new uptrend.
Special thanks go out to FX Salesman Joseph Binestock for his recognition of the chart pattern.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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