EUR/NZD in Ascending Channel on Four-Hour Chart

Channel patterns seem to be popular lately. While everyone is waiting for EUR/NZD to breakout from its
long-term falling wedge pattern on the weekly timeframe, the currency pair prepared another interesting setup for the FX traders. H4 chart now shows an obvious ascending channel that follows a major downtrend wave, which lasted for about a month — from mid-October till the second week of November. Since ascending channel is a continuation pattern, a downside breakout is to be expected in this case.
The chart below shows the pattern marked with yellow lines. The entry levels are located at the distance of 10% of channel’s height and are marked with the cyan lines. Green lines form the moving targets with a profit level of 100% of the channel’s height. Breakout stop-loss is to be set to the trigger bar’s high (or low for bullish breakout). A previous bar’s high (low) is to be used if the trigger bar did not trade much inside the channel. The whole setup is best executed with pending Sell Stop (or Buy Stop) orders.

You can also download my MetaTrader 4 chart template for this EUR/NZD pattern.
Do not forget to revisit this post for my trading updates on this pattern.
Update 2012-11-27 14:59 GMT: Bearish position triggered about 4 hours ago at 1.5725 with SL at 1.5802 and TP at 1.5507. Unfortunately, the price barely touched the entry point and then pulled back significantly. I am afraid my 10% entry buffer failed me. This trough can be just a new lower point of a reforming channel.
Update 2012-11-29 15:48 GMT: Alas, my stop-loss was hit less than an hour ago.

If you have any questions or comments regarding this EUR/NZD channel pattern, please feel free to reply via the form below.