It means that the magnitude of price movement within the Wedge pattern is decreasing.

Wedges signal a pause in the current trend.

When you encounter this formation, it signals that forex traders are still deciding where to take the pair next.

Types of Wedges

A Falling Wedge is a bullish chart pattern that takes place in an upward trend, and the lines slope down.

A Rising Wedge is a bearish chart pattern that’s found in a downward trend, and the lines slope up.

Wedges can serve as either continuation or reversal patterns.

In our next session, we’ll take a look at a falling wedge.