Using the “technical Insight” research tool under the Market Analysis tab, I searched for currency pairs that confirmed any classic technical reversal pattern and one currency pair with an interesting topping pattern emerged.
The Technical Insight scanning tool is a great way to help traders save valuable time looking for trading opportunities around technical analysis events.
The GBP/NOK confirmed a Top Triangle-Top Wedge pattern. This pattern tells us the GBP/NOK may have reached a top, showing signs of a reversal as the currency pair has broken downward after a period of uncertainty or consolidation.
Source: GAIN Capital, TradingView
A Top Triangle shows two converging trendlines as prices reach lower highs and higher (or stable) lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks down below the lower trendline with a noticeable increase in volume, confirming this bearish pattern as a reversal of the prior uptrend.
The MACD (Moving Average Convergence Divergence) oscillator is also indicating bearish momentum as the indicator trends lower below its signal line.
Resistance can be found at 12.87 with support at 12.01.
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