Double Top Terminates NZD/JPY Uptrend

NZD/JPY is showing a great bearish breakout opportunity that has crystallized now when the double top formation on the daily chart can be seen clearly. It appears to be terminating a strong rising trend that was active since mid-October. A breakout signal is needed for confirmation of this assumption as there is a chance for the currency pair to continue going up following current consolidation.
The chart shows the double top pattern with two yellow lines — the upper one is marking the peaks, while the lower one is forming a pattern’s ‘neckline.’ If you look at the latter, you can see that it is slightly declined, which is a warning sign for this kind of patterns, but it is relatively small enough to ignore. The cyan line is my breakout entry point, and the green line is my target profit level. I will place my stop-loss near the breakout candle’s high or, if the breakout candle is trading mostly outside the pattern, on the previous candle’s high.

The chart was built using the ChannelPattern script. You can download my MetaTrader 4 chart template for this NZD/JPY pattern. It can be traded using my free Chart Pattern Helper EA.
Update 2015-01-22: It did not take long for the breakout to happen. The trade has triggered yesterday at 89.355. Stop-loss was set to 91.905, while take-profit was set to 85.573. The risk-to-reward ratio looks OK. The breakout wave looks to be strong:

Update 2015-01-30 10:36 GMT: This double top pattern proves profitable as the currency pair has hit my take-profit target about two hours ago:


If you have any questions or comments regarding this double top on NZD/JPY chart, please feel free to submit them via the form below.