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Another Descending Channel — This Time on EUR/USD

October 4, 2020 (Last updated on October 15, 2020) by

After peaking on September 1, the EUR/USD currency pair is trading in a clear downtrend, which took the form of a descending channel as of today. A descending channel inside a bigger uptrend offers a bullish breakout opportunity — the smaller channel serves as a trend continuation pattern.

The yellow lines on the screenshot below mark the descending channel’s borders. The cyan line shows the level where an entry order could be placed. It is located at 10% of the channel’s width above the upper border. The green line can serve as a take-profit level; it is located above the channel, at the distance equal to the channel’s full width. The stop-loss will be placed at the low of the breakout candle. If the breakout candle trades mainly outside the channel, the preceding candle will be used. I will ignore bearish breakouts out of this formation.

EUR/USD - Descending Channel Pattern on Daily Chart as of 2020-10-04

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this EUR/USD pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2020-10-05 13:00 GMT: The currency pair went up and hit my entry level today at 11:40 GMT with open price at 1.17610, stop-loss at 1.17172, and take-profit at 1.19412 (subject to change):

EUR/USD - Descending Channel Pattern on Daily Chart as of 2020-10-05 - Post-Entry Screenshot

Update 2020-10-15 10:08 GMT: Following the loss-hitting retracement in the AUD/NZD descending channel, this pattern has also ran out of power and switched to a rapid fall in EUR/USD, triggering my stop-loss just about one and a half hours ago:

EUR/USD - Descending Channel Pattern on Daily Chart as of 2020-10-15 - Post-Exit Screenshot

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

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