Ascending broadening wedge - two possible scenariosThis is an interesting move folks; identifying an ascending broadening wedge pattern has the same chance more or less to continue downward or to breakout and go upward. In my opinion, based on the bigger trend's descending triangle wedge, and the minor descending triangle wedge following it (the fib retracements placed on the graph), my bet would go towards the bearish breakout.
What do you guys think?
Below are some interesting facts to use in your strategies:
Bearish breakout
If the wedge’s lower support line breaks, the probability that the price will reverse and continue back up is higher than it falling lower. The odds are close at about 51:49.
Selling at a downward break of the mid line of the pattern greatly improves the odds of success. If the price breaks the mid line of an ascending broadening wedge, there’s a 53% chance that a further downward move will happen.
Bullish continuation
From historical currency data, there is about a 55% probability of a further bullish advancement after a break of the upper resistance line. The bullish move lasts at least for the same duration as the pattern itself.
Based on historical forex data, the ascending broadening wedge typically ends in a bearish or downwards correction in price. But only just.In 47.8% of the patterns, the upside move was greater.
Reference/Read more at:
forexop.com
