The ascending triangle consists of flat resistance line and a rising support line. The formation suggests that demand is stronger than supply. The breakout should occur on the upside, and it consists of the width of the base of the triangle as measured from the breakout point.
The Figure below displays the resistance line defined by points A, C, and E is flat. The converging bottom line, defined by points B, D, and F, is sloped upward. The price objective is the with of the base of the triangle (AA') measured above the resistance line from the breakout point G (GG'.)
In the numerical example, the price objective is 106.00, as the 200-pip difference between 105.00 and 103.00, measured from 104.00. Trading volume is decreasing steadily toward the tip of the triangle, but increases rapidly on the breakout.
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