The double bottom that is currently forming on the daily GBP/USD chart has a potential for stopping the medium-term bearish trend that persists since the Brexit referendum. The formation is not ideal — it lacks symmetry and has a malformed middle part. Yet it may offer a valid trading signal in case of the upside breakout.
The image below shows the double bottom marked with the yellow lines. The lower one marks the two troughs. The upper one marks the neckline and midpoint. The cyan line will be used as an entry level for a bullish breakout. I will set my take-profit to the green line, located at 100% of the pattern’s height above the upper border. I will ignore the downside breakouts of this double bottom formation. You can click on the image to see a full-size chart:
I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/USD pattern. You can trade it using my free Chart Pattern Helper EA.
If you have any questions or comments regarding this double bottom on GBP/USD chart, please feel free to submit them via the form below.
Posted on Forex blog. Click Here For Original Source Of The Article