GBP/NZD After Double Top

A double top formation is currently threatening to terminate the incredibly fast ascension of GBP/NZD observed during the last four months. The pattern looks a bit short-lived but it it is also ending a rather compact uptrend, so it cannot be a detrimental disadvantage. Both tops are already in their place, and it is now time to wait for the neckline breakout.
The chart below shows a double top delimited with the yellow lines. My proposed entry level is located at the cyan line — just 10% of the pattern’s height below the neckline. My target is seen at 100% of the pattern’s height below the neckline — at the green line. I will use the breakout bar’s high for my stop-loss order; or, if the breakout bar will trade mostly below the neckline, I will use the previous bar’s high. Since double top is a reverse pattern for a bullish trend, I will not consider taking a long position here in case of an upward breakout. You can click on the image to see its full-size version:

The chart was built using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/NZD pattern. It can be traded using my free Chart Pattern Helper EA.
Update 2015-08-25: I have now cancelled this trade setup as the yesterday’s price action had completely invalidated the pattern:

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

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