Pennants are price patterns that look like … well, pennants, right? Little triangles, of price bars which start out long and get shorter and shorter. They’re ideally about 6-30 price bars long, usually toward the 6 end of the range, and usually come after a sharp move in price.
Anyway, they’re not magic of course but they sure are nice to see to confirm the strength of a trend. Think of them as healthy, orderly little consolidations. They suggest a continued move in the direction of the trend. Let’s watch the EUR/USD and see if the pair doesn’t pop higher, breaking through the mini-resistance of the top pennant line.
P.S.: A little one is forming on Georgio‘s EUR/GBP trade from last week … it’ll get us to the next higher target if it breaks!
Leave a Reply