📊 Chart Type: 1-Hour (H1)
💹 Asset: EUR/JPY
📈 Technical Patterns: Double Bottom, Trendline Breakout, Retest
📌 Overview of the Chart
The EUR/JPY chart showcases a bullish reversal setup, characterized by a Double Bottom pattern, a trendline breakout, and a successful retest. This combination suggests a potential continuation towards higher price levels, making it an ideal setup for traders looking for breakout entries.
The price action initially followed a downtrend, but buyers stepped in at key support zones, leading to the formation of a strong reversal pattern. Now, the price is testing a key resistance level, and if it breaks out, we could see a significant upward move.
🟢 Key Technical Analysis Breakdown
1️⃣ Double Bottom Formation – A Bullish Reversal Signal
🔹 The Double Bottom is a classic reversal pattern that forms after an extended downtrend.
🔹 In this case, price found strong support at 160.139, forming two lows (Bottom 1 & Bottom 2), indicating buyer dominance.
🔹 The confirmation of the pattern comes with a break above the neckline at around 162.000, suggesting a shift from bearish to bullish momentum.
2️⃣ Trendline Breakout & Retest
🔹 A descending trendline had been acting as dynamic resistance, pushing prices lower.
🔹 Recently, the price broke above the trendline, signaling a potential trend shift.
🔹 Now, price is retesting the trendline, which is a key factor in confirming whether the breakout is valid.
🔹 If the retest holds, it could trigger a strong bullish move towards the next resistance zone.
📍 Support & Resistance Zones
🔹 Support Level (160.139):
The lowest point in the chart, where price tested twice and formed the Double Bottom.
Buyers stepped in aggressively at this level, preventing further decline.
Stop Loss Placement: Below this support zone for long trades.
🔹 Resistance Zone (163.725 - Target Level):
The previous swing high and a major supply zone.
A breakout above this area could lead to further bullish momentum.
📈 Trading Strategy – How to Trade This Setup?
✅ Bullish Trade Setup (Breakout & Retest Confirmation)
This setup is ideal for traders looking to capitalize on breakout and retest strategies.
📌 Entry:
Wait for a strong bullish candle to confirm the retest of the trendline.
A break above the 162.500 level could be a good entry confirmation.
📌 Target:
First target: 163.725 (Resistance Zone).
If momentum continues, the next upside target could be around 164.500.
📌 Stop Loss:
Below 160.139 (previous support level) to minimize risk.
Alternatively, place it below the trendline retest zone if entering aggressively.
📌 Risk-to-Reward Ratio (RRR):
This trade offers a strong RRR, as the downside risk is limited, while the upside potential is higher.
🔴 Bearish Scenario – What if the Retest Fails?
While the bias is bullish, traders must be prepared for a fake breakout scenario. If price fails to hold above the trendline and neckline, the structure might break down.
📌 Bearish Entry:
If price rejects the retest zone and closes back below 161.500, it could indicate a false breakout.
📌 Target:
160.139 (Support Level).
📌 Stop Loss:
Above the trendline retest zone to protect against unexpected bullish moves.
🔎 Key Takeaways & Final Thoughts
✅ The Double Bottom pattern signals a potential trend reversal.
✅ The trendline breakout & retest adds further confirmation to the bullish bias.
✅ A breakout above 162.500 could accelerate buying pressure toward 163.725.
✅ Risk management is essential: A well-placed stop loss below the support level ensures minimal downside risk.
✅ If price rejects the retest zone, traders should be prepared for a possible bearish reversal.
📌 Overall Bias: Bullish ✅
📌 Trade Confirmation: Needs trendline retest hold + bullish breakout 📈
📌 Key Level to Watch: 162.500 (Breakout Confirmation Zone) 🔥
💡 Pro Tip: Always wait for confirmation before entering a trade. A strong bullish candlestick pattern (e.g., engulfing candle) on the H1 or H4 timeframe could provide extra confidence in the setup! 🚀
💹 Asset: EUR/JPY
📈 Technical Patterns: Double Bottom, Trendline Breakout, Retest
📌 Overview of the Chart
The EUR/JPY chart showcases a bullish reversal setup, characterized by a Double Bottom pattern, a trendline breakout, and a successful retest. This combination suggests a potential continuation towards higher price levels, making it an ideal setup for traders looking for breakout entries.
The price action initially followed a downtrend, but buyers stepped in at key support zones, leading to the formation of a strong reversal pattern. Now, the price is testing a key resistance level, and if it breaks out, we could see a significant upward move.
🟢 Key Technical Analysis Breakdown
1️⃣ Double Bottom Formation – A Bullish Reversal Signal
🔹 The Double Bottom is a classic reversal pattern that forms after an extended downtrend.
🔹 In this case, price found strong support at 160.139, forming two lows (Bottom 1 & Bottom 2), indicating buyer dominance.
🔹 The confirmation of the pattern comes with a break above the neckline at around 162.000, suggesting a shift from bearish to bullish momentum.
2️⃣ Trendline Breakout & Retest
🔹 A descending trendline had been acting as dynamic resistance, pushing prices lower.
🔹 Recently, the price broke above the trendline, signaling a potential trend shift.
🔹 Now, price is retesting the trendline, which is a key factor in confirming whether the breakout is valid.
🔹 If the retest holds, it could trigger a strong bullish move towards the next resistance zone.
📍 Support & Resistance Zones
🔹 Support Level (160.139):
The lowest point in the chart, where price tested twice and formed the Double Bottom.
Buyers stepped in aggressively at this level, preventing further decline.
Stop Loss Placement: Below this support zone for long trades.
🔹 Resistance Zone (163.725 - Target Level):
The previous swing high and a major supply zone.
A breakout above this area could lead to further bullish momentum.
📈 Trading Strategy – How to Trade This Setup?
✅ Bullish Trade Setup (Breakout & Retest Confirmation)
This setup is ideal for traders looking to capitalize on breakout and retest strategies.
📌 Entry:
Wait for a strong bullish candle to confirm the retest of the trendline.
A break above the 162.500 level could be a good entry confirmation.
📌 Target:
First target: 163.725 (Resistance Zone).
If momentum continues, the next upside target could be around 164.500.
📌 Stop Loss:
Below 160.139 (previous support level) to minimize risk.
Alternatively, place it below the trendline retest zone if entering aggressively.
📌 Risk-to-Reward Ratio (RRR):
This trade offers a strong RRR, as the downside risk is limited, while the upside potential is higher.
🔴 Bearish Scenario – What if the Retest Fails?
While the bias is bullish, traders must be prepared for a fake breakout scenario. If price fails to hold above the trendline and neckline, the structure might break down.
📌 Bearish Entry:
If price rejects the retest zone and closes back below 161.500, it could indicate a false breakout.
📌 Target:
160.139 (Support Level).
📌 Stop Loss:
Above the trendline retest zone to protect against unexpected bullish moves.
🔎 Key Takeaways & Final Thoughts
✅ The Double Bottom pattern signals a potential trend reversal.
✅ The trendline breakout & retest adds further confirmation to the bullish bias.
✅ A breakout above 162.500 could accelerate buying pressure toward 163.725.
✅ Risk management is essential: A well-placed stop loss below the support level ensures minimal downside risk.
✅ If price rejects the retest zone, traders should be prepared for a possible bearish reversal.
📌 Overall Bias: Bullish ✅
📌 Trade Confirmation: Needs trendline retest hold + bullish breakout 📈
📌 Key Level to Watch: 162.500 (Breakout Confirmation Zone) 🔥
💡 Pro Tip: Always wait for confirmation before entering a trade. A strong bullish candlestick pattern (e.g., engulfing candle) on the H1 or H4 timeframe could provide extra confidence in the setup! 🚀
💰FREE GOLD signals in Telegram:
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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.
💰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.