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GBP/JPY Is in Process of Forming Double Top Pattern

March 24, 2019 (Last updated on April 17, 2019) by

GBP/JPY has been rising in an uptrend since January 3 flash crash created a deep spike on the daily chart of this currency pair. Lately, the rally stalled in a formation with two peaks, which closely resembles a double top pattern. The formation becomes valid only following a breakout below the pattern’s neckline.

The chart below shows the neckline and the two tops marked with the yellow lines. The cyan line marks my buffer zone of 10% of the pattern’s height to enter a short position on breakout. I will place the take-profit at where the green line is. It is placed at 100% of the pattern’s height below the neckline. I will set my stop-loss to the high of the breakout candle or to the high of the preceding one if the breakout candle is trading mostly below the neckline. I won’t trade bullish breakouts from this trend reversal pattern. You can click on the image below to see a full-size screenshot:

GBP/JPY - Double Top Pattern on Daily Chart as of 2019-03-24

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/JPY pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2019-04-17: It looks like the pattern is no longer valid — the currency pair went sideways and is no longer offering the double top entry setup:

GBP/JPY - Double Top Pattern on Daily Chart as of 2019-04-17 - Post-Cancellation Screenshot

If you have any questions or comments regarding this double top on the GBP/JPY chart, please feel free to submit them via the form below.

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