Forex Blog

A major uptrend consolidation pattern is now visible on the H4 chart of the EUR/AUD currency pair. It has started forming back in early May and now looks pretty impressive — with all the necessary features of a proper ascending triangle, which include a horizontal upper side and an inclined lower side confirmed by at least three price points.

You can see the triangle’s borders shown with the yellow lines on the chart image below. The cyan horizontal line is the breakout trigger for entry. The green horizontal line is the take-profit level for the breakout trade. Both are based on the pattern’s height at the base. I will set my stop-loss to the low of the breakout candle or to the low of the preceding candle if the breakout one is mostly outside the triangle. I will ignore the bearish breakouts from this pattern. In fact, a significant bearish deviation will invalidate the ascending triangle. Click the image if you want a bigger screenshot:

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

Update 2016-05-24 9:18 GMT: The currency pair has broken through the upper border and triggered my entry at 1.56461 today at 6:40 GMT. The stop-loss is set to 1.55148. The take-profit is set to 1.60180, giving a nice potential risk-to-reward ratio. Unfortunately, the breakout does not look too strong:

Update 2016-05-24 17:25 GMT: EUR/AUD has rapidly retreated and hit my stop-loss in less than 12 hours after trade open time:

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