As there seems to be a lot of interest in some of the currencies I would like to show you some charts we’ve been following for a very long time. Most of the charts will be long term in nature which won’t do us much good in the short term, but they will keep us in tune to the direction these currencies are most likely to take
Knowing what to expect in the longer term is important not only to currency and commodity traders but to the very Countries who’s currencies are impacted and to their exporters and importers as well.
Long time members may remember some of these massive tops in 2011 which led to the sharp decline in the PM complex and commodities. I won’t spend a lot of time on these charts as they’re pretty self explanatory.
The $CAD, Canadian Dollar, has built out a massive double top formation, broke below the double top trendline in 2015, followed by a backtest.
You may have noticed the H&S top which formed the right top. Below is the weekly chart which shows the double H&S top in more detail.
The weekly chart for the $XBP, British Pound, was one of the first times I showed how a triangle can morph into a bigger consolidation pattern, as shown by the red circles. The backtest to the bottom rail produced a H&S top which launched the multiple impulse moves down followed by a consolidation pattern.
The 30 year monthly chart for the $XBP is set up a little different than some of the other major currencies. In the 1990’s the $XBP built out a double bottom which had a measured move up to the 211 area. After the small H&S top was in place the $XBP basically crashed below the double bottom hump all the way down to the previous multi year lows. After chopping sideways for almost 5 years the $XBP took out the multi year lows on the Brexit vote.
Next is the $XAD, Australian Dollar, which shows its 2011 H&S top with several odd numbered reversal patterns.
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