“INDICATOR OF THE DAY” - SHOOTING STAR CANDLE FORMATION
Gbp/Usd: The latest rally in the pair to fresh 2009 highs by 1.6745 has left daily studies once again looking stretched and subject to a healthy corrective pullback. Price action today is confirming with the potential formation of a bearish shooting star top. A shooting star candle formation is indicative of a shift in an up-trend in favor of some bearish momentum. The actual set-up occurs when the market opens, rallies sharply, and then proceeds to give back all of the intraday gains to close at the lower end of the candle. This price action can be clearly seen in the chart below. However, while we recommend that traders become aware of this set-up, at this juncture, it is only a potential shooting star formation and contingent on a close by 1.6600.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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