V Reversal Watch on GBPUSD and EURUSD
Hi, and welcome to Thursday’s update. With all the recent buying of risk currencies to a retreating USD, we have noticed a V reversal pattern forming on the GBPUSD and the EURUSD.
A V reversal pattern is, basically as it sounds, a price pattern that is shaped like a V. The pattern can show firm demand as buyers fight back quickly, matching the previous selling. After the V pattern, we like to see a new reaction lower, with buyers breaking the last high to confirm the pattern. At this stage, we are waiting to see if buyers can break that high on both pairs to confirm the pattern.
If today’s rallies fail and we see the GBPUSD and the EURUSD break yesterday’s low, this would be seen as a warning, and it could also be telling us that buyer strength is not strong as first thought.
This Friday’s U.S. employment data could also be a factor for the current pattern, and USD strength obviously could make or break this pattern. Traders will be paying attention to its release this Friday at 8:30 am EST.
GBPUSD & EURUSD Analysis Video
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