EURUSD Consolidating at Wedge Support, Awaiting Consolidation Breakout
Cory Mitchell, CMT
The EURUSD has formed a wedge, starting with the March 27 swing low and the March 29 swing high. The price is currently along the bottom of that wedge and consolidating.
I am awaiting a breakout of the consolidation to trigger another trade. I am not directionally biasing myself. This consolidation could break out in either direction.
A continued decline below 1.01915 (varies by broker) indicates the short-term downward trend remains underway. The price will be breaking below the wedge, so the pattern will likely no longer be useful if the pair continues to tumble.
A stop loss is placed just outside the consolidation on the opposite side from the breakout.
I am currently using trailing stop losses on my positions to get out of profitable trades. If I can capture the bulk of a typical price swing, I am happy.
Renko charts work well as a trailing stop loss.
A rally above the consolidation high near 1.0944 (varies by broker) signals the wedge is continuing. The top of the wedge is near 1.10, which would typically be a profit target level, but prices are not staying in patterns very long, so I will still opt for a trailing stop loss exit.
I am currently short from the last consolidation breakout. The price consolidated near 1.1025 and then broke to the downside.
By Cory Mitchell, CMT. Join me in my free Facebook swing trading group.
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.