This EUR/GBP 1-hour chart showcases a classic Inverse Head & Shoulders (H&S) pattern, signaling a potential trend reversal from bearish to bullish. This pattern is considered one of the most reliable technical formations for spotting upcoming upward momentum, particularly after a prolonged downtrend.
🔎 Market Overview
Currency Pair: EUR/GBP
Timeframe: 1-Hour (H1)
Current Price: 0.83720
Trend: Transitioning from a downtrend to a potential bullish breakout
Key Pattern: Inverse Head & Shoulders
Trading Bias: Bullish (Pending breakout confirmation)
📊 Chart Breakdown & Technical Analysis
1️⃣ Market Structure & Trend Analysis
Before the formation of the Inverse Head & Shoulders, the market was in a strong downtrend, making lower highs and lower lows. However, buyers started stepping in near the 0.8350 level, preventing further decline. This rejection at key support has set the stage for a potential trend reversal.
Left Shoulder: Price formed a minor low around 0.8370, followed by a small bounce.
Head: Price made a deeper low around 0.8351, confirming strong support and buyer interest.
Right Shoulder: Price attempted another dip but failed to break below the previous low, forming a higher low near 0.8370, signaling increasing bullish pressure.
Neckline Resistance: 0.8385 - 0.8390 zone – a crucial level that price needs to break for confirmation of an uptrend.
2️⃣ Key Support & Resistance Levels
Support Level: 0.83513 (Major demand zone)
Resistance Levels:
Neckline: 0.8385 - 0.8390 (Breakout confirmation zone)
Major Resistance: 0.84308 (Target level)
Curve Zone: A dynamic resistance trendline that has been containing price action. A breakout above this curve signals a potential shift in trend.
📈 Trading Strategy – Bullish Breakout Plan
✅ Entry Strategy:
A long trade should be considered only after a confirmed breakout above the neckline (0.8385 - 0.8390). The confirmation comes when:
A strong bullish candle closes above the neckline.
Increased trading volume supports the breakout.
A possible retest of the neckline as new support (0.8385) before continuation.
🎯 Target Price & Stop Loss:
Take Profit (TP): 0.84308 (Projected move based on pattern size).
Stop Loss (SL): Below 0.83513 (Right Shoulder low).
Risk-to-Reward Ratio (RRR): 1:2 or higher, making this a high-probability trade setup.
🛑 Risk Management & Trade Confirmation:
Volume Confirmation: A breakout should be accompanied by a volume spike, confirming strong buyer interest.
Fakeout Warning: If price briefly breaks above the neckline but then falls back below, it could be a false breakout. In this case, waiting for a retest would be a safer approach.
Trailing Stop: Once price moves toward 0.8410, a trailing stop can help secure profits in case of market reversals.
🧐 Summary – Key Takeaways
✅ Inverse Head & Shoulders Identified – A reliable bullish reversal pattern.
✅ Breakout Zone: 0.8385 - 0.8390 (Watch for confirmation).
✅ Target Price: 0.84308 (Potential profit zone).
✅ Stop Loss: Below 0.83513 (Protect against downside risk).
✅ Risk-to-Reward Ratio: Favorable (1:2 or better).
✅ Trading Plan: Buy above the neckline, aim for 0.8430, and manage risk properly.
📌 Final Thought: If the neckline is broken with strong momentum, expect a bullish move toward 0.8430+. However, traders should remain cautious of potential fakeouts and manage risk accordingly.
📢 Share your thoughts in the comments! Are you bullish on EUR/GBP? 🚀📊
#EURGBP #ForexTrading #TechnicalAnalysis #TradingSetup #InverseHeadAndShoulders
🔎 Market Overview
Currency Pair: EUR/GBP
Timeframe: 1-Hour (H1)
Current Price: 0.83720
Trend: Transitioning from a downtrend to a potential bullish breakout
Key Pattern: Inverse Head & Shoulders
Trading Bias: Bullish (Pending breakout confirmation)
📊 Chart Breakdown & Technical Analysis
1️⃣ Market Structure & Trend Analysis
Before the formation of the Inverse Head & Shoulders, the market was in a strong downtrend, making lower highs and lower lows. However, buyers started stepping in near the 0.8350 level, preventing further decline. This rejection at key support has set the stage for a potential trend reversal.
Left Shoulder: Price formed a minor low around 0.8370, followed by a small bounce.
Head: Price made a deeper low around 0.8351, confirming strong support and buyer interest.
Right Shoulder: Price attempted another dip but failed to break below the previous low, forming a higher low near 0.8370, signaling increasing bullish pressure.
Neckline Resistance: 0.8385 - 0.8390 zone – a crucial level that price needs to break for confirmation of an uptrend.
2️⃣ Key Support & Resistance Levels
Support Level: 0.83513 (Major demand zone)
Resistance Levels:
Neckline: 0.8385 - 0.8390 (Breakout confirmation zone)
Major Resistance: 0.84308 (Target level)
Curve Zone: A dynamic resistance trendline that has been containing price action. A breakout above this curve signals a potential shift in trend.
📈 Trading Strategy – Bullish Breakout Plan
✅ Entry Strategy:
A long trade should be considered only after a confirmed breakout above the neckline (0.8385 - 0.8390). The confirmation comes when:
A strong bullish candle closes above the neckline.
Increased trading volume supports the breakout.
A possible retest of the neckline as new support (0.8385) before continuation.
🎯 Target Price & Stop Loss:
Take Profit (TP): 0.84308 (Projected move based on pattern size).
Stop Loss (SL): Below 0.83513 (Right Shoulder low).
Risk-to-Reward Ratio (RRR): 1:2 or higher, making this a high-probability trade setup.
🛑 Risk Management & Trade Confirmation:
Volume Confirmation: A breakout should be accompanied by a volume spike, confirming strong buyer interest.
Fakeout Warning: If price briefly breaks above the neckline but then falls back below, it could be a false breakout. In this case, waiting for a retest would be a safer approach.
Trailing Stop: Once price moves toward 0.8410, a trailing stop can help secure profits in case of market reversals.
🧐 Summary – Key Takeaways
✅ Inverse Head & Shoulders Identified – A reliable bullish reversal pattern.
✅ Breakout Zone: 0.8385 - 0.8390 (Watch for confirmation).
✅ Target Price: 0.84308 (Potential profit zone).
✅ Stop Loss: Below 0.83513 (Protect against downside risk).
✅ Risk-to-Reward Ratio: Favorable (1:2 or better).
✅ Trading Plan: Buy above the neckline, aim for 0.8430, and manage risk properly.
📌 Final Thought: If the neckline is broken with strong momentum, expect a bullish move toward 0.8430+. However, traders should remain cautious of potential fakeouts and manage risk accordingly.
📢 Share your thoughts in the comments! Are you bullish on EUR/GBP? 🚀📊
#EURGBP #ForexTrading #TechnicalAnalysis #TradingSetup #InverseHeadAndShoulders
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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.
💰FREE GOLD signals in Telegram:
t.me/goldmastertradezone
💰FREE GOLD Scalping signals Daily 5-6 Trades in Telegram: t.me/goldmastertradezone
t.me/goldmastertradezone
💰FREE GOLD Scalping signals Daily 5-6 Trades in Telegram: t.me/goldmastertradezone
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.