Technical analysis involves studying price action and identifying patterns that provide insights into potential future movements. One common pattern is the ascending channel, where price consistently makes higher highs and higher lows within two parallel trendlines. This pattern suggests an ongoing uptrend as buyers remain in control.
On the EURNZD daily chart, price is currently rebounding from the lower boundary of an ascending channel, marked by multiple previous bounces (blue arrows). The upper boundary has acted as resistance (red arrows), leading to price pullbacks each time it was tested.
Key Levels:
Trading Plan: Potential Entry & Stop-Loss Strategy
Entry Strategy:
Stop-Loss Placement:
Below the recent low at 1.8100, allowing room for volatility.
Take Profit Targets:
Risk Management & Considerations
Overall, this setup presents a bullish opportunity with a well-defined risk-to-reward ratio as long as price respects the lower boundary of the ascending channel.
On the EURNZD daily chart, price is currently rebounding from the lower boundary of an ascending channel, marked by multiple previous bounces (blue arrows). The upper boundary has acted as resistance (red arrows), leading to price pullbacks each time it was tested.
Key Levels:
- Support Zone: 1.8150 – 1.8100 (Lower boundary of the channel)
- Immediate Resistance: 1.8400 – 1.8500 (Mid-channel and previous price congestion area)
- Major Resistance: 1.8800 – 1.9000 (Upper boundary of the channel)
Trading Plan: Potential Entry & Stop-Loss Strategy
Entry Strategy:
- Aggressive Entry: Buy near 1.8150 – 1.8200 (current support) with confirmation of bullish candlestick formation (e.g., bullish engulfing, pin bar).
- Conservative Entry: Wait for price to reclaim 1.8300 – 1.8350 as confirmation of bullish momentum.
Stop-Loss Placement:
Below the recent low at 1.8100, allowing room for volatility.
Take Profit Targets:
- First Target (Short-Term): 1.8400 – 1.8500 (mid-channel resistance).
- Final Target (Medium-Term): 1.8800 – 1.9000 (upper channel boundary).
Risk Management & Considerations
- If price breaks below 1.8100, this would invalidate the ascending channel setup, signaling a possible trend reversal.
- Watch for confirmation signals like increased volume and strong bullish momentum before entering a trade.
- If price rejects mid-channel resistance, consider adjusting stop-loss to breakeven and securing partial profits.
Overall, this setup presents a bullish opportunity with a well-defined risk-to-reward ratio as long as price respects the lower boundary of the ascending channel.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.