CHF/JPY Consolidates in Descending Triangle on 4-Hour Chart

A four-hour chart of CHF/JPY currency pair shows a clear downtrend active since December 4. The bearishness becomes particularly strong after January 1. However, the downtrend stalls into a consolidation on January 5. The consolidation eventually takes form of a descending triangle pattern.
As you can see on the chart below, the triangle is marked with the yellow borderlines. The height (H) of the triangle is measured at its base. At 10% of H below the lower border, the cyan entry level is found. At 100% of H below the lower border, you can see the green target level. I will set my stop-loss to the high of the breakout bar or to the high of the preceding bar if the breakout one will have its body mostly outside of the pattern. I will ignore bullish breakouts from the descending triangle.

I have used the ChannelPattern script to help me build the entry and exit levels for this setup. You can download my MetaTrader 4 chart template for this CHF/JPY pattern. You can trade it using my free Chart Pattern Helper EA.
Update 2016-01-19 21:52 GMT: I have cancelled the pending trade due to the fact that the pattern is no longer valid.


If you have any questions or comments regarding this descending triangle on CHF/JPY chart, please feel free to submit them via the form below.