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Chart Pattern Analysis

figUre 13.55 Downtrending Channel Action on the 4‐Hour Chart of EURUSD.

Source: MetaTrader 4

figUre 13.56 Channel Action on the 15‐Min Chart of EURUSD.

Source: MetaTrader 4

In Figure 13.56, we see a horizontal channel (or rectangle formation) meeting

its minimum one‐to‐one price target. Notice how price retraces after the target

is met.

Cup and handle pattern

A cup and handle formation is simply a rounding bottom with a handle. Cup and

handle formations are regarded as bullish reversal formations. Volume should

gradually subside toward the middle of the formation and should ideally start to

increase thereafter, in anticipation of a breakout. This formation tends to develop