EUR/USD Might Continue Its Way Down Following Ascending Channel Breakout

Last week, I posted a bullish flag pattern on the long-term weekly timeframe of EUR/USD. Even though today’s ascending channel on the daily chart seems to contradict the previous formation, in fact, it serves to reinforce it as the current trade setup (if triggered) will play out entirely inside the flag’s consolidation area.

The image below shows the channel with two rising yellow lines. My potential entry level is at the cyan line, which is positioned at 10% of the channel’s width below the lower border. I will set my take-profit to where the green line is (at 100% of the channel’s width below the lower border). The stop-loss level isn’t fixed to any line — it will be set to the high of the breakout candle. However, if the breakout candle trades mostly outside of the channel, the stop-loss will be set to the high of the preceding candle. I will ignore bullish breakouts from a continuation pattern that follows a dowtrend.

I 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.

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

Posted on Forex blog.

from Forex Blog https://www.earnforex.com/blog/eur-usd-might-continue-its-way-down-following-ascending-channel-breakout/