Overview of the Chart
The EUR/USD 1-hour chart presents a bullish trading setup, featuring a well-defined falling wedge pattern, a trendline breakout, and a retest phase, signaling a potential upward move. The chart is marked with key technical elements such as support and resistance zones, breakout confirmation, and risk management parameters.
This analysis will break down each component of the chart, explaining the logic behind the setup and how traders can approach this opportunity.
1. Identified Chart Patterns
Falling Wedge Formation (Bullish Reversal Signal)
The price action formed a falling wedge, characterized by lower highs and lower lows, creating a narrowing price channel.
This pattern is typically a bullish reversal structure, as it indicates weakening selling pressure before an expected breakout.
The wedge’s downward movement ended with a strong breakout to the upside, signaling buyers regaining control.
2. Key Technical Levels
Support & Resistance Zones
Support Level (Buyers’ Stronghold)
The horizontal support level is a price area where buyers have previously stepped in, preventing further declines.
This level has been tested multiple times, reinforcing its strength as a key demand zone.
Resistance Zone (Profit Target Area)
The highlighted resistance zone represents a supply area where the price has struggled to move past in previous sessions.
The target price level aligns with this resistance, making it a realistic profit target for the long position.
3. Trendline Breakout Confirmation
Before forming the wedge, the chart shows an uptrend with a breakout above a trendline.
This trendline breakout was an early signal of bullish strength, aligning with the later wedge breakout.
After the breakout, the price came back for a retest, which is a key confirmation before further upward movement.
4. Retesting Phase Before the Upward Move
After breaking out of the wedge, the price returned to the breakout level to confirm support.
Retesting is a crucial validation step—if the price holds above this level, it increases the probability of a continued bullish move.
This retesting action provides a potential entry point for traders looking to go long.
5. Trade Setup & Risk Management Strategy
Trade Entry:
A buy entry is considered after the retest is confirmed (price holding above the breakout level).
Stop Loss Placement (Risk Control):
The stop loss is placed below the previous low at 1.07790, ensuring protection against fake breakouts or unexpected reversals.
Take Profit Target (Projected Price Move):
The target price is set at 1.09698, which aligns with previous resistance levels and the measured move from the wedge breakout.
This provides a strong risk-to-reward ratio, making the setup favorable for bullish traders.
6. Risk-Reward Ratio & Trade Viability
Risk: The distance between the entry point and the stop loss is relatively small, making it a low-risk trade.
Reward: The potential upside move is significantly higher than the risk, creating a high reward-to-risk ratio trade.
This type of technical confluence increases the probability of a successful trade, making it an attractive opportunity.
7. Conclusion & Trading Strategy
📌 Key Takeaways:
✅ The falling wedge breakout signals a bullish reversal.
✅ The trendline breakout and retest add further confirmation to the trade setup.
✅ The support and resistance zones provide a clear risk management strategy.
✅ The risk-reward ratio makes this an attractive long trade setup.
💡 Trading Plan:
🔹 Enter Long after retest confirmation above the breakout level.
🔹 Stop Loss: 1.07790 (below previous low).
🔹 Take Profit: 1.09698 (previous resistance zone).
Final Thoughts
This EUR/USD setup is a textbook example of a bullish reversal following a falling wedge breakout. Traders who patiently wait for a confirmed retest can capitalize on this high-probability trade setup, aiming for a strong bullish continuation.
🔹 Tags: #EURUSD #ForexTrading #TechnicalAnalysis #Breakout #PriceAction #TradingSetup #SupportResistance
The EUR/USD 1-hour chart presents a bullish trading setup, featuring a well-defined falling wedge pattern, a trendline breakout, and a retest phase, signaling a potential upward move. The chart is marked with key technical elements such as support and resistance zones, breakout confirmation, and risk management parameters.
This analysis will break down each component of the chart, explaining the logic behind the setup and how traders can approach this opportunity.
1. Identified Chart Patterns
Falling Wedge Formation (Bullish Reversal Signal)
The price action formed a falling wedge, characterized by lower highs and lower lows, creating a narrowing price channel.
This pattern is typically a bullish reversal structure, as it indicates weakening selling pressure before an expected breakout.
The wedge’s downward movement ended with a strong breakout to the upside, signaling buyers regaining control.
2. Key Technical Levels
Support & Resistance Zones
Support Level (Buyers’ Stronghold)
The horizontal support level is a price area where buyers have previously stepped in, preventing further declines.
This level has been tested multiple times, reinforcing its strength as a key demand zone.
Resistance Zone (Profit Target Area)
The highlighted resistance zone represents a supply area where the price has struggled to move past in previous sessions.
The target price level aligns with this resistance, making it a realistic profit target for the long position.
3. Trendline Breakout Confirmation
Before forming the wedge, the chart shows an uptrend with a breakout above a trendline.
This trendline breakout was an early signal of bullish strength, aligning with the later wedge breakout.
After the breakout, the price came back for a retest, which is a key confirmation before further upward movement.
4. Retesting Phase Before the Upward Move
After breaking out of the wedge, the price returned to the breakout level to confirm support.
Retesting is a crucial validation step—if the price holds above this level, it increases the probability of a continued bullish move.
This retesting action provides a potential entry point for traders looking to go long.
5. Trade Setup & Risk Management Strategy
Trade Entry:
A buy entry is considered after the retest is confirmed (price holding above the breakout level).
Stop Loss Placement (Risk Control):
The stop loss is placed below the previous low at 1.07790, ensuring protection against fake breakouts or unexpected reversals.
Take Profit Target (Projected Price Move):
The target price is set at 1.09698, which aligns with previous resistance levels and the measured move from the wedge breakout.
This provides a strong risk-to-reward ratio, making the setup favorable for bullish traders.
6. Risk-Reward Ratio & Trade Viability
Risk: The distance between the entry point and the stop loss is relatively small, making it a low-risk trade.
Reward: The potential upside move is significantly higher than the risk, creating a high reward-to-risk ratio trade.
This type of technical confluence increases the probability of a successful trade, making it an attractive opportunity.
7. Conclusion & Trading Strategy
📌 Key Takeaways:
✅ The falling wedge breakout signals a bullish reversal.
✅ The trendline breakout and retest add further confirmation to the trade setup.
✅ The support and resistance zones provide a clear risk management strategy.
✅ The risk-reward ratio makes this an attractive long trade setup.
💡 Trading Plan:
🔹 Enter Long after retest confirmation above the breakout level.
🔹 Stop Loss: 1.07790 (below previous low).
🔹 Take Profit: 1.09698 (previous resistance zone).
Final Thoughts
This EUR/USD setup is a textbook example of a bullish reversal following a falling wedge breakout. Traders who patiently wait for a confirmed retest can capitalize on this high-probability trade setup, aiming for a strong bullish continuation.
🔹 Tags: #EURUSD #ForexTrading #TechnicalAnalysis #Breakout #PriceAction #TradingSetup #SupportResistance
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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.