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Will EUR/GBP Return to Long-Term Bearish Trend?

April 12, 2015 (Last updated on May 1, 2015) by

Despite the discouraging failures of my most recent two attempts to earn from the chart patterns, I still plan continuing with my strategy further. The euro/pound pair is on a verge of breaking the neckline of its medium-term double top formation. It is presenting a peak of the euro’s two weeks long recovery wave from the 8-year low of March 11.

The pattern is very smooth. You can see the tops and the neckline marked with the yellow border channel on the image below. I will risk a short position entry on the break below the cyan line, which is at exactly 10% of the pattern’s height below the neckline. I will then set my stop-loss to the high of the breakout candle. The take-profit at the green line looks rather conservative as it is above the March low. You can click on the image to get a chart of a bigger size:

EUR/GBP - Double Top Pattern on Daily Chart as of 2015-04-12

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

Update 2015-04-13 11:15 GMT: Sell order triggered at .0.72044 about 40 minutes ago. The stop-loss level is set to 0.72786, take-profit level is set to 0.70575. It is hard to tell whether the breakout is valid as of now — we will have to wait for tomorrow to see how the price behaves. Please have a look at this post-entry chart screenshot (click to enlarge):

EUR/GBP - Double Top Pattern - Post-Entry Screenshot as of 2015-04-13

Update 2015-05-01: The trade was closed at stop-loss yesterday. EUR/GBP rallied and went above the double top pattern:

EUR/GBP - Double Top - Post Exit Screenshot

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

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