By Russell, ForexYard – The EUR/NOK has been weakening significantly. As such, the 4-hour chart displays a falling wedge pattern.
The pattern shows a two converging trend lines that will eventually come together. Traders can see the downward slant of the pattern with the price action making contact with both the upper and lower borders.
Typically wedge patterns signal a continuation of the existing trend. However, as this wedge pattern runs in the same direction of the trend, this can be considered a potential reversal of the downward sloping trend. Therefore, this is a bullish chart pattern.
To trade the pattern, traders will want to wait for a breakout of the EUR/NOK of no more than 50 pips above the upper line of the chart pattern and go long.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
