We are seeing some textbook reversal patterns GBP/USD.
The culprit was Friday’s volatility. The extreme push lower followed by the higher close formed a hammer pattern on the daily chart.
What makes this chart so compelling is that it appears in USD/CAD, EUR/USD and AUD/USD as well as in oil and gold.
The short-term case is also a textbook pattern, this time it’s an inverse head-and-shoulders that targets the 1.6725 – 1.6747 resistance.
The neckline was broker early in the sesssion today and so far, the price action has been convincing. There is no significant resistance. A fall back below 1.6500 wold be a troublesome scenario for the bulls.