The EUR/USD 1-hour chart presents a compelling bearish setup, characterized by a rejection from a key resistance zone, a weakening support level, and a potential trendline breakdown. These technical elements suggest an increased probability of downward movement if bearish momentum persists.
Key Technical Components:
Resistance Rejection & Selling Pressure:
The price action tested a well-defined resistance zone, which aligns with previous swing highs.
A rejection from this level indicates that sellers have stepped in, preventing further upside movement.
This area serves as a supply zone, reinforcing a bearish outlook as long as price remains below it.
Support Level at Risk of Breakdown:
The market is currently testing a support zone, which has previously acted as a demand area.
A break below this support would confirm increased selling pressure, likely triggering a more significant decline.
The support level is structurally weak, as the price has already tested it multiple times, increasing the likelihood of a breakdown.
Ascending Trendline Violation:
The ascending trendline has been a key dynamic support for the recent uptrend.
If the price breaks below this trendline with strong volume, it would signify a potential trend reversal, shifting market sentiment from bullish to bearish.
A confirmed breakdown would further validate the bearish continuation scenario.
Sell Stop Placement & Profit Targets:
A Sell Stop order is positioned below the support zone to capture a breakdown trade.
The first Take Profit (TP1) is set at 1.08312, a level that has historically acted as support and resistance.
The second Take Profit (TP2) is placed at 1.07659, representing a more extended bearish move toward the next major demand zone.
Conclusion & Trading Strategy:
Bearish Scenario: If the price breaks below the support level and ascending trendline, it could trigger a sell-off, leading to a potential downside move toward TP1 and TP2.
Bullish Rebound Possibility: If the support level holds and buyers regain control, the price may attempt to retest the resistance zone. However, the bearish structure remains dominant unless the price breaks above resistance.
Final Outlook:
Traders should closely monitor price action at the support and trendline intersection. A confirmed breakdown below these levels, preferably with increased volume, would reinforce the bearish outlook. Proper risk management and stop-loss placement above the resistance zone are recommended to mitigate potential reversals.
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Key Technical Components:
Resistance Rejection & Selling Pressure:
The price action tested a well-defined resistance zone, which aligns with previous swing highs.
A rejection from this level indicates that sellers have stepped in, preventing further upside movement.
This area serves as a supply zone, reinforcing a bearish outlook as long as price remains below it.
Support Level at Risk of Breakdown:
The market is currently testing a support zone, which has previously acted as a demand area.
A break below this support would confirm increased selling pressure, likely triggering a more significant decline.
The support level is structurally weak, as the price has already tested it multiple times, increasing the likelihood of a breakdown.
Ascending Trendline Violation:
The ascending trendline has been a key dynamic support for the recent uptrend.
If the price breaks below this trendline with strong volume, it would signify a potential trend reversal, shifting market sentiment from bullish to bearish.
A confirmed breakdown would further validate the bearish continuation scenario.
Sell Stop Placement & Profit Targets:
A Sell Stop order is positioned below the support zone to capture a breakdown trade.
The first Take Profit (TP1) is set at 1.08312, a level that has historically acted as support and resistance.
The second Take Profit (TP2) is placed at 1.07659, representing a more extended bearish move toward the next major demand zone.
Conclusion & Trading Strategy:
Bearish Scenario: If the price breaks below the support level and ascending trendline, it could trigger a sell-off, leading to a potential downside move toward TP1 and TP2.
Bullish Rebound Possibility: If the support level holds and buyers regain control, the price may attempt to retest the resistance zone. However, the bearish structure remains dominant unless the price breaks above resistance.
Final Outlook:
Traders should closely monitor price action at the support and trendline intersection. A confirmed breakdown below these levels, preferably with increased volume, would reinforce the bearish outlook. Proper risk management and stop-loss placement above the resistance zone are recommended to mitigate potential reversals.
Would you like me to refine it further for professional publication or trading forums? 🚀
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.
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.