Elliott Wave Forecast Team
ElliottWave-Forecast.com
Most common trading patterns
Below are some of the most widely used and reliable trading patterns across financial markets.
Ascending triangle
The ascending triangle is a bullish continuation pattern.
Key characteristics:
- Flat resistance line.
- Rising support line.
- Increasing buying pressure.
A breakout above resistance often signals continuation of the uptrend.
Descending triangle
The descending triangle is typically a bearish continuation pattern.
Key characteristics:
- Flat support line.
- Descending resistance line.
- Increasing selling pressure.
A breakdown below support often leads to further downside.
Symmetrical triangle
The symmetrical triangle forms when price compresses between:
- Rising support.
- Falling resistance.
This pattern signals indecision, and breakouts can occur in either direction. Traders often wait for confirmation before entering.
Pennant
Pennants form after strong price moves and represent short consolidation phases.
Key characteristics:
- Sharp impulsive move.
- Brief consolidation.
- Continuation in the original direction.
Pennants often appear in trending markets.
Flag pattern
The flag pattern resembles a small channel moving against the prevailing trend.
Despite the temporary counter-trend movement, the breakout usually occurs in the direction of the original trend, making it a continuation pattern.
Double bottom
The double bottom resembles the letter “W” and signals a potential bullish reversal.
Key characteristics:
- Two failed attempts to break support.
- Increasing buying pressure.
- Break above resistance confirms reversal.
Double top
The double top resembles the letter “M” and signals a potential bearish reversal.
After two failed attempts to break resistance, price often reverses downward.
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Editors’ Picks
EUR/USD trims gains, back below 1.1800
EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.
GBP/USD off highs, recedes to the sub-1.3500 area
Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.
USD/JPY sticks to gains above 155.00, over one-week top ahead of US data
The USD/JPY pair gains positive traction for the third straight day and climbs to over a one-week top, around the 155.35-155.40 region. Data released early today showed that Japan’s key inflation gauge eased to the slowest pace in two years, tempering expectations for an immediate policy tightening by the Bank of Japan.
Editors’ Picks
EUR/USD: US Dollar comeback in the makes? Premium
The US Dollar (USD) stands victorious at the end of another week, with the EUR/USD pair trading near a four-week low of 1.1742, while the USD retains its strength despite some discouraging American data released at the end of the week.
Gold: Escalating geopolitical tensions help limit losses Premium
Gold (XAU/USD) struggled to make a decisive move in either direction this week as it quickly recovered above $5,000 after posting losses on Monday and Tuesday.
GBP/USD: Pound Sterling braces for more pain, as 200-day SMA tested Premium
The Pound Sterling (GBP) crashed to its lowest level in a month against the US Dollar (USD), as critical support levels were breached in a data-packed week.
Bitcoin: No recovery in sight
Bitcoin (BTC) price continues to trade within a range-bound zone, hovering around $67,000 at the time of writing on Friday, and falling slightly so far this week, with no signs of recovery.
US Dollar: Tariffed. Now What? Premium
The US Dollar (USD) reversed its previous week’s decline, managing to stage a meaningful rebound and retesting the area just above the 98.00 barrier when tracked by the US Dollar Index (DXY).
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