EUR/USD – Falling Wedge Breakout from Support Zone | Bullish Reversal Setup (May 2025)
Pair: EUR/USD
Timeframe: 1-Hour (H1)
Chart Pattern: Falling Wedge
Bias: Bullish Reversal
Published: May 1, 2025
🧠 Technical Overview
The EUR/USD pair has formed a classic falling wedge pattern, a well-known bullish reversal formation, following a strong downtrend. This setup is accompanied by a clear structure of support and resistance, along with breakout confluence that strengthens the bullish bias.
📉 Phase 1: Downtrend and Consolidation
Prior to the wedge, the price was in a strong bearish trend, with lower highs and lower lows driving price action down from the mid-1.15 zone.
A consolidation box formed between 1.1280 (support) and 1.1352 (resistance), where price ranged sideways before finally breaking lower on April 30, 2025.
🔻 Phase 2: Falling Wedge Formation
Following the breakdown from the range, EUR/USD began forming a falling wedge, marked by two converging trendlines—sloping resistance and support lines.
This wedge is characterized by:
Multiple clean touches on both trendlines, confirming pattern integrity.
Gradual loss of bearish momentum (price moves became narrower and slower).
Price bottomed out near 1.1277, forming the wedge base.
🔼 Phase 3: Bullish Breakout
On May 1, EUR/USD broke out above the wedge's upper trendline, a key signal of potential trend reversal.
Breakout occurred just after another rejection from the wedge support, showing strong buying interest at the lows.
A minor retracement is expected to retest the breakout level around 1.1352, offering a potential entry opportunity.
🎯 Trade Setup Details
Parameter Level Explanation
Entry (Buy) Above 1.1352 Enter after confirmation of wedge breakout or on a successful retest
Take Profit (TP) 1.1410 Measured by the height of the wedge projected from the breakout point
Stop Loss (SL) 1.1227 Placed below the wedge support and swing low for downside protection
Note: Conservative traders may wait for a full candle close above 1.1352 and a retest confirmation before entering.
📌 Confluences Supporting the Trade
Support Holding at 1.1280: Historical demand zone is acting as a price floor.
Wedge Breakout: A strong technical signal of weakening bearish momentum.
Improving Price Structure: Higher low formation during breakout indicates buying strength.
⚠️ Risk Management Considerations
Stick to proper position sizing aligned with your account risk tolerance (e.g., 1–2% risk per trade).
Avoid premature entries inside the wedge—wait for confirmation of the breakout.
Stay aware of economic events involving EUR and USD, especially NFP, ECB/Fed meetings, and inflation data.
📈 Conclusion
This EUR/USD setup presents a high-probability bullish opportunity, following the breakout of a cleanly defined falling wedge on the H1 timeframe. With confirmation and proper risk controls, this trade offers a favorable risk/reward ratio, targeting a move to 1.1410 while managing downside risk below 1.1227.
Pair: EUR/USD
Timeframe: 1-Hour (H1)
Chart Pattern: Falling Wedge
Bias: Bullish Reversal
Published: May 1, 2025
🧠 Technical Overview
The EUR/USD pair has formed a classic falling wedge pattern, a well-known bullish reversal formation, following a strong downtrend. This setup is accompanied by a clear structure of support and resistance, along with breakout confluence that strengthens the bullish bias.
📉 Phase 1: Downtrend and Consolidation
Prior to the wedge, the price was in a strong bearish trend, with lower highs and lower lows driving price action down from the mid-1.15 zone.
A consolidation box formed between 1.1280 (support) and 1.1352 (resistance), where price ranged sideways before finally breaking lower on April 30, 2025.
🔻 Phase 2: Falling Wedge Formation
Following the breakdown from the range, EUR/USD began forming a falling wedge, marked by two converging trendlines—sloping resistance and support lines.
This wedge is characterized by:
Multiple clean touches on both trendlines, confirming pattern integrity.
Gradual loss of bearish momentum (price moves became narrower and slower).
Price bottomed out near 1.1277, forming the wedge base.
🔼 Phase 3: Bullish Breakout
On May 1, EUR/USD broke out above the wedge's upper trendline, a key signal of potential trend reversal.
Breakout occurred just after another rejection from the wedge support, showing strong buying interest at the lows.
A minor retracement is expected to retest the breakout level around 1.1352, offering a potential entry opportunity.
🎯 Trade Setup Details
Parameter Level Explanation
Entry (Buy) Above 1.1352 Enter after confirmation of wedge breakout or on a successful retest
Take Profit (TP) 1.1410 Measured by the height of the wedge projected from the breakout point
Stop Loss (SL) 1.1227 Placed below the wedge support and swing low for downside protection
Note: Conservative traders may wait for a full candle close above 1.1352 and a retest confirmation before entering.
📌 Confluences Supporting the Trade
Support Holding at 1.1280: Historical demand zone is acting as a price floor.
Wedge Breakout: A strong technical signal of weakening bearish momentum.
Improving Price Structure: Higher low formation during breakout indicates buying strength.
⚠️ Risk Management Considerations
Stick to proper position sizing aligned with your account risk tolerance (e.g., 1–2% risk per trade).
Avoid premature entries inside the wedge—wait for confirmation of the breakout.
Stay aware of economic events involving EUR and USD, especially NFP, ECB/Fed meetings, and inflation data.
📈 Conclusion
This EUR/USD setup presents a high-probability bullish opportunity, following the breakout of a cleanly defined falling wedge on the H1 timeframe. With confirmation and proper risk controls, this trade offers a favorable risk/reward ratio, targeting a move to 1.1410 while managing downside risk below 1.1227.
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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.
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.