On GBPUSD the IHS that I posted yesterday failed to play out and as often happens when that happens on currencies particularly, a head and shoulder pattern facing in the opposite direction appears to be forming:
The GBP weakness may have much to do with the negotiations between the liberal and labour parties in the UK with a view to forming a very weak, and most likely short-lived, centre-left coalition.
Looking at equities, one of the weakest charts of the main equity indicies in the western world is that of the FTSE, with a broken rising wedge / main support trendline and a nicely formed left shoulder and head of a potential head and shoulder pattern:
Elsewhere though, there is some reason to think that support was touched, but not broken, on some other main indices. On the Dow, where a similarly nice looking head and shoulder pattern may be forming, I can also see a type of megaphone, a right angled and ascending broadening formation. That pattern breaks down two thirds of the time, but it isn't broken yet, and leaves the door open for a new high before it does break down:
On the Transports index, the main rising channel remains unbroken:
On XLF, which I check regularly as a potential leading indicator for the rest of the market, the recent downswing bounced exactly at support on a large rising wedge:
Elsewhere, though the recent flight to safety has reversed slightly, USD and bonds have yet to surrender most recent gains. Gold too is still firmly in a steep rising channel having recently broken out of a shallower one:
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