On Friday We Take Profits

Friday brings take-profit action on almost every single FX instrument. It was expected as we mostly saw strong directional movements and it is very common to capture profits after such runs. Interestingly, the places where the retracements began were not random. On those instruments that we analyzed, they happened on important resistances.

GBP/USD is under the influence of the bullish breakout from the mid-term flag. This week we made over 300 pips so traders decided to capture some profits using the tops from May as a trigger. Even with a small retracement, the sentiment is still bullish.

AUD/USD broke the upper line of the pennant (blue) and surged to the upper line of the long-term triangle (red). That one was also used as a resistance and now, the daily candlestick is shaped like a shooting star. Pinbar here is a bad sign and can bring us a deeper correction.

USD/JPY also corrects the movement from the first for days and also uses a strong resistance for that. In this case we are talking about the line connecting lower lows since the end of the 2016. As long as we stay above the 111.8 the sentiment is positive.

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