Understanding the Ascending Triangle

The ascending triangle is a fairly common continuation pattern observed on charts, characterized by a flat resistance line and a rising trendline formed by higher lows. For instance, on the $EURCAD daily, if you saw price repeatedly testing 1.60882 while bouncing off an upward sloping support, that would be a classic setup. The general idea is that buyers are gradually gaining strength, pushing lows higher, and eventually, a breakout above the flat resistance is anticipated. Volume often diminishes during the formation and then picks up on the breakout, which provides some confirmation. These don't always play out perfectly, of course, sometimes they fail and reverse.