Curious Ascending Channel on CHF/JPY
July 21, 2013 (Last updated on July 24, 2013)
CHF/JPY daily chart is now showing a curious example of an ascending channel pattern. It is composed purely of bullish candles. It is a 7-day period of non-stop growth. Since ascending channel is a reverse pattern, a bearish breakout looks even more logical in this situation as the Swiss is certainly in an overbought zone against the Japanese yen now.
Although the pattern itself is marked as usually: yellow lines make up the border, cyan lines — entry levels (10% buffer zone), and inclined green lines — targets (100% of channel’s height), there is one new element on the chart below. It is a horizontal green line drawn at the the next support level. In case of a downside breakout of the channel, I will use either horizontal or sloped green line as my take-profit level, whatever is lower. I decided to add this alternative TP level because the normal target is too close to entry level here (channel’s height is only 115 pips, which is comparable to the average height of the candle inside the channel). Please click on the image to get a full-sized screenshot of the Forex chart:
You can download my MetaTrader 4 chart template for this CHF/JPY pattern. It can be traded using my free Chart Pattern Helper EA.
Update 2013-07-22 06:34 GMT: Short position triggered at 0:00 GMT today. The breakout candle looks very strong but it has already pulled back close to the entry point — not a perfect situation, but it is still not bad. The stop-loss is set to 106.864, take-profit is currently at 105.542, but it will move up gradually.
Update 2013-07-24 12:36 GMT: Stop-loss triggered at 7:45 GMT today. Looks like the pair is forming a new ascending channel right under the one it has just broke out of.
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