Rectangle Pattern (Bullish): Forex Chart Pattern

Formation

The rectangle pattern is characterized by two parallel trendlines representing support and resistance levels respectively connecting the most recent lows and highs of the price, holding a certain bunch of price fluctuations within.

Interpretation of Bullish Rectangle

The price climbing above the resistance line (plus certain deviation is possible) is considered a buy signal as the level at which the asset has been repeatedly sold is finally overcome.

Target price

Following a bullish rectangle pattern formation the price is generally believed to rise at least to its target level, calculated as follows:

T = R + H,

		Where:
		
T – target price;
R – resistance level (pattern’s top);
H – pattern’s height (distance between support and resistance).