In today’s trading sniper video, I will show you the power of false breakout patterns. There has been quite a few of them on many instruments recently: indices, commodities or currencies. Today, the false breakout patterns come from the Forex market and this is what we’ll focus on today.
The EURAUD is currently moving significantly higher but it did not look so optimistic during the first half of the week. The price managed to bounce from the upper line of the triangle and used a great bearish momentum to break the lower line of this pattern. That gave us a sell signal, which turned out to be a fake one. Instead of going lower, the price created a double bottom formation and moved back inside of the triangle. That is a false bearish breakout and promote a strong upswing.
Another one is the USDMXN, where the price also went below the lower line of the triangle and in addition to this, below a crucial horizontal support. That breakout was also false and actually helped to create an inverse head and shoulders formation, which gave us a short-term buy signal.
We will finish with the most popular instrument on the market the EURUSD. The price here is obviously in a super strong up trend but it looks like the market is getting ready for a bearish correction. The price is still yet to test the broken 1.144 as a closest support. I think this movement would be more then welcome. Hard to imagine an attack on the 1.20 level without some kind of a correction in the meantime.
For a look at all of today’s economic events, check out our economic calendar.