EUR/USD Daily Triangle Set Up
With indecision comes congestion and consolidation and that's the market environment within which triangles ideally form. The EUR/USD has been moving in a distribution cycle as prices congest below the 1.4500 level.
The Continuation Triangle Emerging chart pattern is a relatively short pattern at just 28 candles in Length (R). The Initial Trend (Z) is low reflecting very little trend in this time frame. This correlated perfectly with not only psychology behind triangles (no opinion and no trend) but also the distribution/accumulation market cycle. As a refresher, the difference between these two is volatility and range. Distribution is more volatile and wider ranging while accumulation is less volatile as prices move sideways in a narrower range.
The setup here is to wait for prices to either rally to the downtrend resistance line (X) for a breakout or sell off to the uptrend support line (Y) for a breakdown. Either way an excellent and simple indication to help confirm the pierce of either of these two lines would be a MACD Histogram set on 12,26,9.
Consider the psychological levels before taking the entry as "00" and "50" pip levels can be formidable as orders stack up at these common entry/exit points. The breakout to the upside will have to contend with the 1.4400 level if prices are to follow through higher. The breakdown level is just below the 1.4100 level at 1.4070.
Since the daily is a large time frame, do not hesitate to confirm the move higher or lower with shorter term time frame chart pattern alerts.
For further information on this and other chart patterns visit www.autochartist.com.
The Continuation Triangle Emerging chart pattern is a relatively short pattern at just 28 candles in Length (R). The Initial Trend (Z) is low reflecting very little trend in this time frame. This correlated perfectly with not only psychology behind triangles (no opinion and no trend) but also the distribution/accumulation market cycle. As a refresher, the difference between these two is volatility and range. Distribution is more volatile and wider ranging while accumulation is less volatile as prices move sideways in a narrower range.
The setup here is to wait for prices to either rally to the downtrend resistance line (X) for a breakout or sell off to the uptrend support line (Y) for a breakdown. Either way an excellent and simple indication to help confirm the pierce of either of these two lines would be a MACD Histogram set on 12,26,9.
Consider the psychological levels before taking the entry as "00" and "50" pip levels can be formidable as orders stack up at these common entry/exit points. The breakout to the upside will have to contend with the 1.4400 level if prices are to follow through higher. The breakdown level is just below the 1.4100 level at 1.4070.
Since the daily is a large time frame, do not hesitate to confirm the move higher or lower with shorter term time frame chart pattern alerts.
For further information on this and other chart patterns visit www.autochartist.com.
- 3 September |
- 0 comments
Post new comment