12.6 C
Munich

Two worrisome chart breakdowns look to have been invalidated

Must read


Head and shoulders patterns don’t always work out

Beware of textbook chart patterns.

Charts that are nearly ‘perfect’ have a habit of not working out.

Last week I highlighted a potential head and shoudlers top in CAD/JPY, which had been one of the best trades in FX this year.
Head and shoulders patterns don't always work out
I even warned in the post that the “chart is almost too textbook”.

What happened? It spun around in a hurry. After spiking lower the following day it pulled off an intraday reversal and has since jumped higher.

The story is similar in copper, which is back up to $4.23/lb after falling to $3.95 in Thursday’s trade.

Was there any way of seeing it coming? For me this is a great example of why the fundamentals are so important. Even as I was writing about the charts, I didn’t beleive we’d see a breakdown.

Counter to the charts, I think we’re going to get past delta. Highly
vaccinated places are seeing a reversal in cases and even in hard hit
parts of the US, there’s a loss of momentum.

The trick was trading it and I think the two big clues at the end of last week were that intraday reversal along with the Fed’s Kaplan expressing doubts on a September taper.
Invest in yourself. See our forex education hub.



Source link

- Advertisement -spot_img

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img

Latest article