Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

Minor EUR/USD Descending Channel

April 6, 2014 (Last updated on April 11, 2014) by

EUR/USD has formed a downward channel on its daily chart. The currency pair is declining since March 19, following an uptrend that lasted for a month and a half. It is now natural to expect a tradable bullish breakout from the current channel pattern.

As you can see on the image below, the descending channel is marked with the yellow borders. The entry level that I will use is located above the upper border and is marked with the cyan line. My potential take-profit level is depicted with the green line above the entry. The lower entry/TP lines were added for the sake of symmetry and will be ignored in my trading. Although you surely may try using a bearish breakout here, I would assume the pattern to be invalidated upon the price reaching the lower entry line.

EUR/USD - Descending Сhannel on Daily Chart as of 2014-04-06

The SL and TP levels depicted above have been built using my Channel Pattern script. You can download my MetaTrader 4 chart template for this EUR/USD pattern. I will use my free Chart Pattern Helper EA to trade this pattern.

Update 2014-04-08 16:28 GMT: Long position triggered at 1.37945 just four hours ago. Stop-loss is set to 1.3737, while the current take-profit level is located at 1.39151. The actual take-profit level will probably be lower, as the TP line slowly approaches the entry level with each day passed. As you can see, the breakout was rather strong:

EUR/USD - Descending Channel Post Entry Screenshot as of 2014-04-08

Update 2014-04-11 09:05 GMT: Take-profit triggered at 1.38928 about 9 hours ago. The price just rallied to my target:

EUR/USD - Descending Channel - Post-Exit Chart Screenshot

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

Leave a Reply

required
required (will not be published)