Three Flag Formations that will help You in Trading

First, DAX, so the most popular index in Europe. DAX already used the flag in the last week (blue). Back then, formation helped this index to recover after strong bearish breakout of the horizontal support on 11800 points (yellow). This week, also brings us a flag but much smaller one (green). As we mentioned, this is a trend continuation pattern, so promotes a further upswing.

Next instrument is the AUDUSD, where flag was a thing in the second half of May and beginning of June. As expected, price broke its lower line. That movement was initiated by the double top formation. Gladly, we warned our traders about such a possibility in one of our earlier reports. Long-term sentiment is very negative.

USDJPY is the last instrument. Here, the price remains in a flag formation for the past two weeks. This pattern, promotes the breakout to the downside. Negative approach is strengthened by the fact, that we are close to the mid-term down trendline, which can act as a resistance. Shooting star on the daily chart also can be handy for sellers. Only thing which is stopping from going full bear here is the major, long-term up trendline.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

This article was originally posted on FX Empire

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