Double Top on GBP/USD Daily Chart

EUR/AUD is not the only pair forming a double top recently. If you look at the daily chart of the Pound vs. Dollar pair, it is easy to notice that the price has hit a significant resistance near the prominent twin tops (October 1 and October 23). The resulting double top pattern is an opportunity to cash out on the trend retracement of the bullish wave that lasted since July 9 this year (there was a nice ascending channel trade on GBP/USD D1 during that trend).
The chart below depicts a trade setup generated by my ChannelPattern script with pattern’s height channel taken as a guide. The double top is delimited with yellow lines. The entry level is shown with a cyan line. The take-profit level, a conservative one (100% of the pattern’s height), is marked with a green line. The stop-loss can be set to the high of the breakout bar. Bullish breakouts from the double top pattern are usually ignored. You can click on the image to view a full-sized chart screenshot:

You can download my MetaTrader 4 chart template for this GBP/USD pattern. I will use my free Chart Pattern Helper EA to trade this pattern.
Update 2013-11-12 9:57 GMT: Sell order triggered at 1.58558 at 09:31 GMT today. Stop-loss was set to 1.59919, take-profit was set to 1.55246. Although the breakout candle is very strong, it barely touched the entry level and may go for a retracement from this point. Please have a look at this post-entry chart screenshot (click to enlarge):

Update 2013-11-13 19:18 GMT: Looks like the unemployment report from the United Kingdom has killed my position. The trade failed as the currency pair retraced back to stop-loss at 10:30 GMT today. It lasted just little over a day:


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