GBP_JPN (110 Pips)Technical Analysis: Triple Resistance Test Failure
Pattern Overview
A significant bearish signal has emerged with the triple resistance test failure, followed by a key reversal pattern at a high pivot point. This formation suggests increased selling pressure and potential trend reversal.
Key Technical Elements
1. Triple Resistance Test
- Price made three distinct attempts to break above resistance level
- Each attempt showed progressively weaker buying momentum
- Final rejection demonstrates strong selling pressure at this level
2. High Pivot Point Formation
- Created at the peak of the third resistance test
- Represents a critical turning point in market sentiment
- Historical significance as a major price level
3. Bearish Engulfing Pattern
- Large bearish candle completely engulfing previous bullish candle
- Occurred at a crucial technical level (High Pivot Point)
- Significant volume accompanied the pattern, validating its importance
Technical Implications
- The failure of three consecutive attempts to break resistance indicates strong overhead supply
- The bearish engulfing pattern at the pivot point suggests a potential trend reversal
- Expect increased selling pressure in the near term
- Previous resistance level now likely to act as strong resistance for future attempts
Risk Management Considerations
- Short positions should consider placing stops above the high pivot point
- Long positions should exercise caution and potentially reduce exposure
- Volume analysis crucial for confirming strength of the reversal
Conclusion
The combination of a triple resistance failure and bearish engulfing pattern at a high pivot point presents a compelling case for bearish sentiment. Traders should monitor volume and price action closely for confirmation of the reversal signal.
