EUR/GBP has been in a prolonged downtrend over the past several weeks, characterized by lower highs and lower lows. However, the recent price action shows signs of exhaustion in selling pressure, as the candles begin to compress into a Falling Wedge pattern — a classic bullish reversal formation.
The wedge is defined by two descending, converging trendlines. As price moves closer to the apex of this wedge, volatility contracts and volume typically dries up (not shown here, but conceptually expected). This signals that market participants are preparing for a directional breakout, most likely to the upside in this context.
🔍 Key Technical Elements:
🔸 1. Falling Wedge Pattern:
The Falling Wedge is a bullish setup that forms during a downtrend and signals a potential reversal when confirmed. Price here has followed a steady decline, but the slowing momentum and structure of the wedge suggest the sellers are losing control.
The wedge acts as a compression zone, where bearish moves are becoming less impactful.
Price touches both upper and lower wedge boundaries multiple times, increasing pattern validity.
A breakout has already occurred, and the pair is now undergoing a textbook retest of the broken wedge resistance (now acting as support).
🔸 2. Retest at Key Support Zone (SR Interchange):
The retest is happening precisely at a former support/resistance flip zone, labeled SR – Interchange on the chart. This is a historically significant area where price has reacted multiple times, adding confluence to the setup.
If this level holds during the retest, it may invite strong buying interest, fueling the bullish breakout move.
🔸 3. Resistance Zones & Targets:
Inner Resistance (~0.8460): First hurdle for bulls; breaching this will signal strong momentum.
Minor Resistance (~0.85618): This is the primary target of the setup, based on previous structure and wedge height projection.
Major Resistance (~0.8740): A longer-term bullish objective if momentum sustains beyond the first two targets.
These zones serve as logical areas for profit-taking and reassessment.
📐 Measured Move & Target Projection:
The projected breakout target of 0.85618 is derived using a combination of:
The vertical height of the wedge at its thickest point.
Previous market structure resistance zones.
Fibonacci and price symmetry (if analyzed further).
This target also aligns with a previous supply zone, making it a strong magnet for price if bullish momentum kicks in.
💡 Trading Plan (Not Financial Advice):
This setup provides a good risk-to-reward opportunity if executed with patience and proper confirmation:
Entry Zone: After bullish confirmation at the retest (e.g., bullish engulfing candle, pin bar, or break of minor lower high).
Stop Loss: Below the SR Interchange zone or recent swing low (~0.8350–0.8360).
Target 1: Inner Resistance (~0.8460)
Target 2: Minor Resistance (~0.85618)
Target 3 (extended): Major Resistance (~0.8740)
🔄 Market Psychology:
This chart setup reflects a shift in momentum and sentiment:
Sellers have driven the price down consistently but have failed to create new significant lows with force.
Buyers are stepping in at key demand zones, creating higher lows within the wedge.
The breakout suggests smart money accumulation, and the current retest offers one of the last low-risk entries before a broader move.
🔔 Confirmation to Watch:
Bullish reversal candlestick patterns at the retest zone.
Break above local lower highs near 0.8440–0.8460.
Momentum indicators (if used) showing divergence or crossover confirmation.
📉 Bias:
Short-Term Bullish
Valid if support at 0.8390–0.8400 holds and price confirms breakout continuation.
🧠 Minds Post (Expanded Explanation)
Title: EUR/GBP Bullish Reversal Developing – Falling Wedge Breakout Retest
EUR/GBP has broken out of a textbook falling wedge on the 4H chart, which often signals the end of a downtrend and beginning of a new bullish phase. The price is currently pulling back, testing the breakout zone — a crucial step in confirming the validity of the breakout.
If this retest holds, we may see a sharp move toward the 0.8460 and 0.8560 levels — both key resistances based on past price action.
This pattern reflects a deeper market psychology shift — from consistent bearish dominance to a potential bullish takeover. Smart money may already be positioning here.
I’m watching for confirmation at the support zone around 0.8390. If price holds and breaks above local highs, a continuation toward the upper resistance is likely.
Let the market come to you. Don’t chase. Wait for structure, then trade with confidence.
The wedge is defined by two descending, converging trendlines. As price moves closer to the apex of this wedge, volatility contracts and volume typically dries up (not shown here, but conceptually expected). This signals that market participants are preparing for a directional breakout, most likely to the upside in this context.
🔍 Key Technical Elements:
🔸 1. Falling Wedge Pattern:
The Falling Wedge is a bullish setup that forms during a downtrend and signals a potential reversal when confirmed. Price here has followed a steady decline, but the slowing momentum and structure of the wedge suggest the sellers are losing control.
The wedge acts as a compression zone, where bearish moves are becoming less impactful.
Price touches both upper and lower wedge boundaries multiple times, increasing pattern validity.
A breakout has already occurred, and the pair is now undergoing a textbook retest of the broken wedge resistance (now acting as support).
🔸 2. Retest at Key Support Zone (SR Interchange):
The retest is happening precisely at a former support/resistance flip zone, labeled SR – Interchange on the chart. This is a historically significant area where price has reacted multiple times, adding confluence to the setup.
If this level holds during the retest, it may invite strong buying interest, fueling the bullish breakout move.
🔸 3. Resistance Zones & Targets:
Inner Resistance (~0.8460): First hurdle for bulls; breaching this will signal strong momentum.
Minor Resistance (~0.85618): This is the primary target of the setup, based on previous structure and wedge height projection.
Major Resistance (~0.8740): A longer-term bullish objective if momentum sustains beyond the first two targets.
These zones serve as logical areas for profit-taking and reassessment.
📐 Measured Move & Target Projection:
The projected breakout target of 0.85618 is derived using a combination of:
The vertical height of the wedge at its thickest point.
Previous market structure resistance zones.
Fibonacci and price symmetry (if analyzed further).
This target also aligns with a previous supply zone, making it a strong magnet for price if bullish momentum kicks in.
💡 Trading Plan (Not Financial Advice):
This setup provides a good risk-to-reward opportunity if executed with patience and proper confirmation:
Entry Zone: After bullish confirmation at the retest (e.g., bullish engulfing candle, pin bar, or break of minor lower high).
Stop Loss: Below the SR Interchange zone or recent swing low (~0.8350–0.8360).
Target 1: Inner Resistance (~0.8460)
Target 2: Minor Resistance (~0.85618)
Target 3 (extended): Major Resistance (~0.8740)
🔄 Market Psychology:
This chart setup reflects a shift in momentum and sentiment:
Sellers have driven the price down consistently but have failed to create new significant lows with force.
Buyers are stepping in at key demand zones, creating higher lows within the wedge.
The breakout suggests smart money accumulation, and the current retest offers one of the last low-risk entries before a broader move.
🔔 Confirmation to Watch:
Bullish reversal candlestick patterns at the retest zone.
Break above local lower highs near 0.8440–0.8460.
Momentum indicators (if used) showing divergence or crossover confirmation.
📉 Bias:
Short-Term Bullish
Valid if support at 0.8390–0.8400 holds and price confirms breakout continuation.
🧠 Minds Post (Expanded Explanation)
Title: EUR/GBP Bullish Reversal Developing – Falling Wedge Breakout Retest
EUR/GBP has broken out of a textbook falling wedge on the 4H chart, which often signals the end of a downtrend and beginning of a new bullish phase. The price is currently pulling back, testing the breakout zone — a crucial step in confirming the validity of the breakout.
If this retest holds, we may see a sharp move toward the 0.8460 and 0.8560 levels — both key resistances based on past price action.
This pattern reflects a deeper market psychology shift — from consistent bearish dominance to a potential bullish takeover. Smart money may already be positioning here.
I’m watching for confirmation at the support zone around 0.8390. If price holds and breaks above local highs, a continuation toward the upper resistance is likely.
Let the market come to you. Don’t chase. Wait for structure, then trade with confidence.
For Daily Trade Setups and Forecast: 📈 t.me/xauusdoptimizer
Premium Signals Fr33: 💯 t.me/xauusdoptimizer
🥰🥳🤩
Premium Signals Fr33: 💯 t.me/xauusdoptimizer
🥰🥳🤩
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
For Daily Trade Setups and Forecast: 📈 t.me/xauusdoptimizer
Premium Signals Fr33: 💯 t.me/xauusdoptimizer
🥰🥳🤩
Premium Signals Fr33: 💯 t.me/xauusdoptimizer
🥰🥳🤩
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.