Perhaps this wasn’t the best week for global indices, but it also wasn’t the worst; especially after the bearish gap at Monday’s opening. Here we are in the last trading day of this week and after some ups and downs, buyers are fighting for the bullish body of the weekly candle, and quite frankly they could be successful. That being said, let’s take a look into the future and try to anticipate the market’s next moves.
For the last couple of days, I was focusing on range trading of major indices, today we’ll go beyond the hourly chart and look at a bigger formation than the latest rectangle; today we’ll look at the symmetric triangle pattern. The price of the SP500 is exactly in the middle of this formation, so there’s an equal chance that the price may move up or move down. What do price action traders do in this case? They wait. A breakout of the upper line will give us a buy signal while a breakout of the lower line will give us a sell signal.
The DAX is in the same pattern, which is slightly less handsome as it’s American counterpart. The mechanics of this formation however, are the same. A breakout of the resistance level would give us a buy signal while a breakout of the support level would give us a sell signal.
Lastly, let’s quickly look at Brent Crude Oil. The rally stretched out and currently the price is creating a head and shoulders pattern. Sellers had a chance to break the neckline and the uptrend line but they failed. But there’s still a chance that buyers will succeed. If the price closes below the combination of these two supports, it would be a strong sell signal.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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