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Chart Art: Fresh Reversal Patterns on Nasdaq and GBP/JPY

November 11, 2022| Forex Market

Are we about to see a big turnaround in the markets soon?

Better keep these reversal formations on your radar!

Here are the breakout levels I’m watching on the Nasdaq 100 index and GBP/JPY.

Nasdaq 100 Index 4-hour Chart

Nasdaq 100 Index 4-hour Chart

Is that a double or triple bottom I’m seeing on the Nasdaq 100 index?

Either way, brace yourselves for a potential rally in the U.S. stock market!

The Nasdaq looks ready to bust through the neckline of its reversal pattern to confirm that the selloff is over. Closing above the 11,600-11,800 zone might be enough to signal that a rally of the same height as the formation is due.

Moving averages are also in the middle of a likely bullish crossover, which would probably encourage more bulls to charge.

However, Stochastic is already closing in on the overbought region to reflect some exhaustion among buyers. Turning lower could attract selling pressure, which might lead the resistance to hold.

In any case, keep your eyes peeled for candlestick signals around these current levels!

GBP/JPY 4-hour Forex Chart

GBP/JPY 4-hour Forex Chart

Guppy might be in for a reversal from its uptrend, as the pair is forming a head and shoulders pattern on the 4-hour chart.

Price has yet to break below the neckline around the 164.00 handle to set off a drop that’s the same height as the formation. That’s roughly 800 pips yo!

Technical indicators aren’t too sold on that for now, though. The 100 SMA is still above the 200 SMA, hinting that there’s a chance the rally could resume.

The 200 SMA even lines up with the neckline to add to its strength as support, but a break below this dynamic support level might add bearish pressure.

Meanwhile, Stochastic is hanging out at the oversold region, which means that sellers could need a time out. If the oscillator turns higher, buyers could return and spur a move back to the nearby resistance levels.

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