Looking at the chart of the EUR vs USD we can see an ascending triangle pattern has developed where the magenta colored triangle is drawn. Ascending triangle patterns are usually bullish continuation patterns with the market making higher lows but same level highs. This formation is like compressing the market at which point the market must eventually bust out of the compressed level. Price has broken the resistance level of the triangle on 12/12/12 where we have entered the market. Price has moved higher and has bounced off of the first profit target at 1.32514. Currently price is retracing and I am looking for price to bounce off of the support of the triangle. At this point reentering the market off of the bounce would be ideal or we can wait for price to break the first profit level at 1.32514. Entering at support and resistance levels gives you a nice place for a stop loss. Taking a trade between support and resistance levels increases your stop loss level so best to enter as close to S&R as possible.
Once price breaks resistance level at target # 1 @ 1.32514 I am looking for the market to move higher to the second target level and possibly retrace before eventually moving on to the third target at 1.34525
Once price breaks resistance level at target # 1 @ 1.32514 I am looking for the market to move higher to the second target level and possibly retrace before eventually moving on to the third target at 1.34525