Hi Everybody. This time I want to share with your guys about something interesting I found on EUR/USD daily chart. As you can see on my daily chart below, we have 4 wedges. The first is the rising wedge, which gave us a valid bearish reversal signal after price broke below the formation. The second wedge is a falling wedge, which is a bullish reversal pattern but failed after price break below the formation and continue the bearish rally. The third one is another falling wedge which gave us an accurate bullish signal after price broke above the formation lead us to current strong bullish phase. And now, we have the fourth wedge, another rising wedge, which is a bearish reversal pattern that should be watched closely next week. We have two simple scenarios here. If price break above the formation, the rising wedge bearish scenario fails and EUR/USD could continue the bullish rally testing 1.3341 (April 30 high). On the other hand, if price break below the formation, the bearish scenario will be confirmed at least testing 1.2735 – 1.2650 region. From past experience we know that sometimes these wedges scenario work, sometimes they don’t, just like any other chart patterns or technical tools. So for the upcoming week, all we need to do is to react correctly to whatever happened to the fourth wedge. I hope this simple information is useful for your own trading plan.
Have a great weekend and see you guys next week.
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