This technical setup on EUR/USD (1H timeframe) highlights a potential high-probability short opportunity based on a combination of price action, chart patterns, and key structural levels. The pair is showing signs of weakening bullish momentum and preparing for a bearish continuation.
🔎 1. Pattern Analysis: Rising Wedge Formation
The primary pattern visible is a Rising Wedge, which is traditionally a bearish reversal formation. It’s defined by:
Higher highs and higher lows, but both trendlines are converging, suggesting weakening bullish control.
Volume (not shown here) typically decreases within a rising wedge, further confirming a potential breakout.
This wedge formed after a previous sharp bullish recovery, acting as a continuation structure that often reverses.
In this case, the price formed multiple touches on both wedge boundaries, enhancing the reliability of the pattern.
🧱 2. Key Structural Zones:
Minor Resistance Zone (~1.1270–1.1285):
Clearly marked on the chart with a blue shaded zone.
Price has reacted from this level multiple times, validating it as a supply area.
The most recent attempt to break above this level failed, further confirming seller dominance.
Consolidation Zone (highlighted in yellow):
Prior to the wedge’s formation, price entered a consolidation phase.
Consolidation often precedes a breakout or a trend reversal. In this case, it provided a base for the rally that formed the wedge.
🔁 3. Breakout and Retest:
Price has broken below the lower support line of the rising wedge.
This breakout is a bearish signal and suggests the pair may now be ready for a stronger downside move.
The price appears to be retesting the broken wedge support, which is a classic confirmation move before continuation.
Retests of broken structures often offer low-risk, high-reward entry opportunities.
🎯 4. Trade Plan and Setup:
Entry Zone: Watch for bearish rejection or candle confirmation on the retest of the wedge support turned resistance.
Stop Loss (SL): Positioned just above the resistance zone, at 1.12887, protecting the trade against false breakouts or reversals.
Take Profit Levels:
TP1 – 1.10649: This level is a strong support zone based on previous price action and structural significance.
TP2 – 1.09670: The full measured move from the height of the wedge. This also aligns with historical support and psychological round number proximity (1.10).
🧠 5. Confluence Factors:
Technical Pattern: Rising wedge = bearish.
Support/Resistance: Multiple reactions to both the resistance zone and wedge trendlines confirm market memory.
Price Action: Break + retest = ideal entry confirmation.
Risk-Reward Ratio: Favorable, especially with conservative TP1 and aggressive TP2 levels.
Macro Context (optional): If posted during news week – potential USD strength based on rate expectations, NFP, or inflation.
⚠️ 6. Risk Management Tips:
Use a position size that aligns with your account risk tolerance (1–2% rule).
Wait for confirmation (bearish engulfing candle or rejection wick) before entering.
Always be prepared for invalidation. If price closes above the resistance zone, this idea is voided.
🔎 1. Pattern Analysis: Rising Wedge Formation
The primary pattern visible is a Rising Wedge, which is traditionally a bearish reversal formation. It’s defined by:
Higher highs and higher lows, but both trendlines are converging, suggesting weakening bullish control.
Volume (not shown here) typically decreases within a rising wedge, further confirming a potential breakout.
This wedge formed after a previous sharp bullish recovery, acting as a continuation structure that often reverses.
In this case, the price formed multiple touches on both wedge boundaries, enhancing the reliability of the pattern.
🧱 2. Key Structural Zones:
Minor Resistance Zone (~1.1270–1.1285):
Clearly marked on the chart with a blue shaded zone.
Price has reacted from this level multiple times, validating it as a supply area.
The most recent attempt to break above this level failed, further confirming seller dominance.
Consolidation Zone (highlighted in yellow):
Prior to the wedge’s formation, price entered a consolidation phase.
Consolidation often precedes a breakout or a trend reversal. In this case, it provided a base for the rally that formed the wedge.
🔁 3. Breakout and Retest:
Price has broken below the lower support line of the rising wedge.
This breakout is a bearish signal and suggests the pair may now be ready for a stronger downside move.
The price appears to be retesting the broken wedge support, which is a classic confirmation move before continuation.
Retests of broken structures often offer low-risk, high-reward entry opportunities.
🎯 4. Trade Plan and Setup:
Entry Zone: Watch for bearish rejection or candle confirmation on the retest of the wedge support turned resistance.
Stop Loss (SL): Positioned just above the resistance zone, at 1.12887, protecting the trade against false breakouts or reversals.
Take Profit Levels:
TP1 – 1.10649: This level is a strong support zone based on previous price action and structural significance.
TP2 – 1.09670: The full measured move from the height of the wedge. This also aligns with historical support and psychological round number proximity (1.10).
🧠 5. Confluence Factors:
Technical Pattern: Rising wedge = bearish.
Support/Resistance: Multiple reactions to both the resistance zone and wedge trendlines confirm market memory.
Price Action: Break + retest = ideal entry confirmation.
Risk-Reward Ratio: Favorable, especially with conservative TP1 and aggressive TP2 levels.
Macro Context (optional): If posted during news week – potential USD strength based on rate expectations, NFP, or inflation.
⚠️ 6. Risk Management Tips:
Use a position size that aligns with your account risk tolerance (1–2% rule).
Wait for confirmation (bearish engulfing candle or rejection wick) before entering.
Always be prepared for invalidation. If price closes above the resistance zone, this idea is voided.
For Daily Trade Setups and Forecast: 📈 t.me/xauusdoptimizer
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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.
For Daily Trade Setups and Forecast: 📈 t.me/xauusdoptimizer
Premium Signals Fr33: 💯 t.me/xauusdoptimizer
🥰🥳🤩
Premium Signals Fr33: 💯 t.me/xauusdoptimizer
🥰🥳🤩
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.