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Descending Channel Inside AUD/NZD Daily Uptrend

September 27, 2020 (Last updated on October 13, 2020) by

I didn’t post any channel pattern setups since 2018, and the last descending channel setup had been posted back in 2017. This makes today’s descending channel on the daily chart of AUD/NZD a rather rare find. The pattern began forming inside a long-term bullish trend of the currency pair since August 18. It is a very smooth example of a descending channel with price candles uniformly filling the space between the borders.

The yellow lines on the chart screenshot below mark the descending channel. The cyan line shows the level I set my pending entry to trigger at. It is placed at 10% of the channel’s width above the upper border. The green line will serve as my take-profit level; it is located above the channel at the distance equal to its 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. Channel breakouts serve as continuation signals for the preceding trend. This means that bearish breakouts are to be ignored in case of a descending channel:

AUD/NZD - Descending Channel Pattern on Daily Chart as of 2020-09-26

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

Update 2020-10-07 13:00 GMT: After meandering a few days near the upper border, the exchange rate has finally reached my entry level at 1.08357 just some 15 minutes ago. The stop-loss level was set to 1.07839, while the take-profit level currently points at 1.09742:

AUD/NZD - Descending Channel Pattern on Daily Chart as of 2020-10-07 - Post-Entry Screenshot

Update 2020-10-13 18:33 GMT: Unfortunately, my stop-loss was hit today at 13:49 GMT during a major bearish wave in AUD/NZD:

AUD/NZD - Descending Channel Pattern on Daily Chart as of 2020-10-13 - Post-Exit Screenshot

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

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