EUR/USD H4 Descending Triangle: Short Setup w/ 1:4RR
The EUR/USD is currently trading at 1.04306, showing a slight decline of -0.14% (-0.00148). The pair is forming a descending triangle pattern, which is typically a continuation pattern in a downward trend.
Key Technical Levels:
- Resistance: 1.04659 (Key resistance level)
- Support: 1.03197 (Current support level/PWL)
- Value Area: Marked on the chart showing price consolidation
Pattern Analysis:
The price action has formed a clear descending triangle with:
- A flat bottom around 1.03197
- Declining tops, creating a downward sloping resistance line
- Decreasing volume during consolidation (visible in the volume bars below)
Indicator Analysis:
1. Volume Profile shows:
- Major value area between 1.04475 and 1.03197
- Point of Control (POC) appears to be around 1.04423
- Decreasing volume suggesting potential breakout incoming
Price Structure:
- Currently trading below the PWH (Previous Week High)
- Trading within the value area
- Showing signs of bearish momentum with lower highs
Short-term Outlook:
Given the descending triangle formation and the position of key technical levels, the setup appears bearish. The following factors support this view:
1. Price is testing the lower boundary of the value area
2. Declining volume during consolidation
3. Unable to break above 1.04659 resistance
4. Formation of lower highs
Trade Setup Parameters:
- Entry Price: 1.04379
- Stop Loss: 1.04659 (280 ticks)
- Take Profit: 1.03197 (1182 ticks)
- Risk: 1.00%
- Position Size: 0.5 lots
- Account Size: 100,000
Risk/Reward Ratio:
The setup offers approximately a 1:4.2 risk-to-reward ratio, which is favorable for a technical setup.
Key Levels to Watch:
- Break below 1.03197 could accelerate selling pressure
- Break above 1.04659 would invalidate the bearish setup
- SSL levels at 1.03198 and 1.04225 acting as additional reference points
Caution:
Traders should be aware of:
- Potential weekend gaps as we're near market close
- Any fundamental catalysts that could affect EUR/USD
- The need for proper position sizing as indicated in the setup
This analysis suggests a bearish bias with clear invalidation levels and a favorable risk-reward ratio. However, proper risk management and confirmation of breakout direction are essential before entering any position.
Key Technical Levels:
- Resistance: 1.04659 (Key resistance level)
- Support: 1.03197 (Current support level/PWL)
- Value Area: Marked on the chart showing price consolidation
Pattern Analysis:
The price action has formed a clear descending triangle with:
- A flat bottom around 1.03197
- Declining tops, creating a downward sloping resistance line
- Decreasing volume during consolidation (visible in the volume bars below)
Indicator Analysis:
1. Volume Profile shows:
- Major value area between 1.04475 and 1.03197
- Point of Control (POC) appears to be around 1.04423
- Decreasing volume suggesting potential breakout incoming
Price Structure:
- Currently trading below the PWH (Previous Week High)
- Trading within the value area
- Showing signs of bearish momentum with lower highs
Short-term Outlook:
Given the descending triangle formation and the position of key technical levels, the setup appears bearish. The following factors support this view:
1. Price is testing the lower boundary of the value area
2. Declining volume during consolidation
3. Unable to break above 1.04659 resistance
4. Formation of lower highs
Trade Setup Parameters:
- Entry Price: 1.04379
- Stop Loss: 1.04659 (280 ticks)
- Take Profit: 1.03197 (1182 ticks)
- Risk: 1.00%
- Position Size: 0.5 lots
- Account Size: 100,000
Risk/Reward Ratio:
The setup offers approximately a 1:4.2 risk-to-reward ratio, which is favorable for a technical setup.
Key Levels to Watch:
- Break below 1.03197 could accelerate selling pressure
- Break above 1.04659 would invalidate the bearish setup
- SSL levels at 1.03198 and 1.04225 acting as additional reference points
Caution:
Traders should be aware of:
- Potential weekend gaps as we're near market close
- Any fundamental catalysts that could affect EUR/USD
- The need for proper position sizing as indicated in the setup
This analysis suggests a bearish bias with clear invalidation levels and a favorable risk-reward ratio. However, proper risk management and confirmation of breakout direction are essential before entering any position.
I hope you’ve had a great day and that your screens were green. 🌟
Happy Trading, and see you next time! 💹✨
Happy Trading, and see you next time! 💹✨
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.
I hope you’ve had a great day and that your screens were green. 🌟
Happy Trading, and see you next time! 💹✨
Happy Trading, and see you next time! 💹✨
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.