EURPLN: A Technical Pattern Emerges with Breakout Potential
05 June 2023
EURPLN, although considered an exotic instrument for some, has proven to be an intriguing pair to watch, especially due to its adherence to technical analysis in recent months.
From February 2022 until April of this year, EURPLN traded within a significant symmetric triangle pattern (depicted in blue). In the first half of April, the price broke below this formation, signaling a clear sell signal. The subsequent period from late April through early May was dominated by a bearish market sentiment, with the price experiencing a steady decline.
More recently, EURPLN has formed a rectangle pattern (highlighted in yellow), and it is worth noting that this formation has occurred strategically. Buyers are relying on the previous low of the triangle from February last year as a support level. Trading this situation is relatively straightforward: a breakout to the upside from the rectangle formation would trigger a buy signal, while a breakout to the downside would indicate a sell signal. Given the prevailing trend, the likelihood of the latter scenario appears more probable.
Overall, EURPLN presents an interesting technical pattern, providing potential trading opportunities based on the breakout direction from the rectangle formation.