Example of Triangle Cont. Pattern & Potential shorting area

FX:GBPAUD   British Pound / Australian Dollar
262 0 15
Well for those who don't know what a triangle breakout pattern is then just google             it and it'll bring it up. But the way to trade it is that when you spot a pattern breakout as such that you measure the height of the triangle, clone it, and measure the distance from the high point of the original triangle pattern and wherever the high point of the cloned measurement could be your estimated target. And as you can see that price actually did make the move up equaling the height of the cloned measurement.

Now that I got that cool fact out of the way, lets move on to the potential trade setup we have brewing. Price seems to have found a temporary top that can form an area of consolidation (aka. range / distribution area / etc.) and the area you can look for shorting opportunities is roughly around the 50% retracement of the previous wave down (No I am not referencing elliot wave theory). If trade is entered your target would be roughly the base / support area around 2.9000 / 2.1000 . Stops would be have to be placed a little above the 61.8% retracement level or 2.1600 . And then once price reaches the base of support you can look for a bullish long entry. Another interesting pattern that may be forming is a bullish flag (trend continuation pattern). If we get a bullish breakout from the potential flag pattern we can see higher lows & highs made by this pair. Also if a bullish breakout of the pattern does happen you can use the 10 & 20 Moving Average Crossover as extra confirmation of a resumption of the bullish trend . The reason behind using those 2 moving averages for this pair is evident in prior price action; in other words this pair tends to have extended bullish runs above those averages and once it falls(daily close) back below the 10 moving average then you should start being cautious about entering longs as it may signal another pullback in the overall bull trend.

Cheers & GL hope you liked the analysis.
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