This was a relatively easy trade. It still amazes me how recurrent chart patterns can be. I have traded similar setups the same way and they have, almost always, yielded the same result. When I spotted this setup, I knew immediately what to expect. My exit also was timely as price rallied over 200 pips soon after my target was hit.
Since the overall trend (on 4-hour time frame) is a downtrend, I was bent on going short than buying. The thick trend line was drawn to mark resistance by joining the close of two previous swing high on 4-hour.
On 1-hour time frame, the rising wedge formed. The resistance of the wedge is in confluence with the thick trend line; and upon its test, a reversal bar formed. I sold at 128.30, set stop loss at 128.61 (31 pips – above most recent high) and target at 127.22 (108 pips – at a support below the most recent low).
EVENTUALLY
The green and indigo clusters (Fibonacci clusters), and the black horizontal line between entry and target served as significant levels that could bounce price.
But it was not to be as price declined steadily to the target soon after it broke out of the wedge.
Profit/Loss: +108 pips
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