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The Cup and Handle pattern is a bullish continuation pattern that suggests the market is consolidating before continuing its upward movement. The pattern is named after its shape, which resembles a cup with a handle.

- Formation: The cup portion of the pattern is a rounded bottom that forms after a downtrend. The price then consolidates in the handle portion, which is a smaller pullback before the price breaks out to the upside.

- Significance: The Cup and Handle pattern indicates that the market has undergone a period of consolidation and is ready for another leg up. Traders often look for a breakout above the handle as a confirmation signal.

Conclusion

Mastering price action patterns in Forex is crucial for traders who want to succeed in the markets. Each of these top 5 chart patterns—Head and Shoulders, Double Top and Double Bottom, Triangles, Flag and Pennant, and Cup and Handle—offers valuable insights into price behavior and helps traders make informed decisions.

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Top 5 Chart Patterns For Price Action Trading