EUR/USD – Falling Wedge Breakout from Key Support Zone
📌 Timeframe: 15-Minute (M15)
🔍 Market: EUR/USD (Euro / US Dollar)
📅 Date Analyzed: April 23, 2025
📈 Bias: Bullish Reversal
🔷 Technical Pattern Identified: Falling Wedge
A classic Falling Wedge pattern has been identified following a ranging market condition. This wedge represents a slowdown in bearish momentum and sets the stage for a bullish reversal.
What is a Falling Wedge?
A Falling Wedge is a bullish chart pattern that occurs when price action is making lower highs and lower lows in a contracting range. This typically indicates that sellers are losing strength, and a breakout to the upside is likely when buying pressure returns.
In This Setup:
Price formed lower highs and lower lows, confined within a narrowing structure.
The wedge concludes near a major support level, adding strength to the reversal probability.
Breakout is expected as buyers defend the support zone aggressively.
🔍 Support & Resistance Zones
🟪 Resistance Zone – 1.13850 to 1.14136
This area has acted as a ceiling for the price. It was tested multiple times during the prior range phase and during the falling wedge formation. A successful breakout above this zone would confirm strong bullish momentum.
🟦 Support Zone – 1.12800 to 1.13000
This horizontal support has held firm across several retests. It represents a demand zone where buyers previously stepped in, forming the base of the current wedge.
🔂 Price Action Structure
Initial Decline: The chart opens with a bearish trend moving downward, ending in a sharp sell-off.
Range-Bound Market: After the drop, price begins to consolidate sideways between the defined support and resistance.
Falling Wedge Formation: The consolidation transitions into a falling wedge pattern.
Support Re-test: Price tests the wedge base and support level once more, forming a potential double-bottom within the wedge.
Expected Breakout: A bullish breakout is anticipated, followed by two potential profit-taking targets.
📌 Trade Execution Plan
✅ Entry Strategy
Wait for a breakout above the wedge resistance line with a solid bullish candle.
Confirm breakout with increased volume or follow-up bullish momentum.
Optional: Enter after a pullback retest of the broken trendline for safer confirmation.
🎯 Take-Profit Levels
TP1: 1.13582 (minor resistance and structure high)
TP2: 1.14136 (measured wedge breakout target & key resistance)
🛑 Stop-Loss Placement
Below wedge support and the horizontal support zone at 1.12730
Allows sufficient room for volatility while maintaining good risk management
⚖️ Risk-Reward Analysis
Risk: ~90 pips (based on SL at 1.12730)
Reward TP1: ~160 pips (TP1 at 1.13582)
Reward TP2: ~320 pips (TP2 at 1.14136)
Risk:Reward Ratio: 1:2 (TP1) and potentially 1:3.5 (TP2)
This favorable risk-reward profile makes the trade setup attractive, especially for intraday or short-term swing traders.
🧠 Confluences and Confidence Factors
Bullish Falling Wedge pattern
Strong historical support zone
Breakout potential aligning with market structure
Double bottom within the wedge for additional confirmation
Potential volume or RSI divergence (if using indicators)
🔎 Additional Notes
Monitor closely during breakout: avoid false breakouts by waiting for candle closure or retest.
News events (USD-related) can increase volatility. Always check the economic calendar before entering.
This setup is ideal for short-term scalpers, day traders, or even intra-week swing traders depending on execution and TP targets.
📌 Timeframe: 15-Minute (M15)
🔍 Market: EUR/USD (Euro / US Dollar)
📅 Date Analyzed: April 23, 2025
📈 Bias: Bullish Reversal
🔷 Technical Pattern Identified: Falling Wedge
A classic Falling Wedge pattern has been identified following a ranging market condition. This wedge represents a slowdown in bearish momentum and sets the stage for a bullish reversal.
What is a Falling Wedge?
A Falling Wedge is a bullish chart pattern that occurs when price action is making lower highs and lower lows in a contracting range. This typically indicates that sellers are losing strength, and a breakout to the upside is likely when buying pressure returns.
In This Setup:
Price formed lower highs and lower lows, confined within a narrowing structure.
The wedge concludes near a major support level, adding strength to the reversal probability.
Breakout is expected as buyers defend the support zone aggressively.
🔍 Support & Resistance Zones
🟪 Resistance Zone – 1.13850 to 1.14136
This area has acted as a ceiling for the price. It was tested multiple times during the prior range phase and during the falling wedge formation. A successful breakout above this zone would confirm strong bullish momentum.
🟦 Support Zone – 1.12800 to 1.13000
This horizontal support has held firm across several retests. It represents a demand zone where buyers previously stepped in, forming the base of the current wedge.
🔂 Price Action Structure
Initial Decline: The chart opens with a bearish trend moving downward, ending in a sharp sell-off.
Range-Bound Market: After the drop, price begins to consolidate sideways between the defined support and resistance.
Falling Wedge Formation: The consolidation transitions into a falling wedge pattern.
Support Re-test: Price tests the wedge base and support level once more, forming a potential double-bottom within the wedge.
Expected Breakout: A bullish breakout is anticipated, followed by two potential profit-taking targets.
📌 Trade Execution Plan
✅ Entry Strategy
Wait for a breakout above the wedge resistance line with a solid bullish candle.
Confirm breakout with increased volume or follow-up bullish momentum.
Optional: Enter after a pullback retest of the broken trendline for safer confirmation.
🎯 Take-Profit Levels
TP1: 1.13582 (minor resistance and structure high)
TP2: 1.14136 (measured wedge breakout target & key resistance)
🛑 Stop-Loss Placement
Below wedge support and the horizontal support zone at 1.12730
Allows sufficient room for volatility while maintaining good risk management
⚖️ Risk-Reward Analysis
Risk: ~90 pips (based on SL at 1.12730)
Reward TP1: ~160 pips (TP1 at 1.13582)
Reward TP2: ~320 pips (TP2 at 1.14136)
Risk:Reward Ratio: 1:2 (TP1) and potentially 1:3.5 (TP2)
This favorable risk-reward profile makes the trade setup attractive, especially for intraday or short-term swing traders.
🧠 Confluences and Confidence Factors
Bullish Falling Wedge pattern
Strong historical support zone
Breakout potential aligning with market structure
Double bottom within the wedge for additional confirmation
Potential volume or RSI divergence (if using indicators)
🔎 Additional Notes
Monitor closely during breakout: avoid false breakouts by waiting for candle closure or retest.
News events (USD-related) can increase volatility. Always check the economic calendar before entering.
This setup is ideal for short-term scalpers, day traders, or even intra-week swing traders depending on execution and TP targets.
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.
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.