EUR/USD – Rectangle Pattern Breakdown | Professional Intraday Analysis
🗓 Date: April 22, 2025
⏱ Timeframe: 15-Minute (Intraday Strategy)
💱 Instrument: Euro / U.S. Dollar (EUR/USD)
📈 Pattern: Bearish Rectangle with Retest & Continuation
🔍 Market Context
The EUR/USD pair experienced a strong impulsive bullish rally, eventually leading into a consolidation phase, where the market moved sideways within a well-defined range. This created a rectangle pattern, a classic continuation or reversal structure depending on breakout direction.
In this case, the consolidation followed by a breakdown signals distribution — where large players offload their positions in anticipation of a downward move.
📊 Technical Structure & Price Action Flow
🧱 Rectangle Pattern Formation
Support Zone: ~1.1405
Resistance Zone: ~1.1493
Price moved between these horizontal zones, creating multiple swing highs and lows, confirming strong boundaries.
The rectangle shows that neither bulls nor bears had control during the range, but momentum was building.
🧠 Price Behavior Inside the Rectangle
Price bounced between support and resistance multiple times, a sign of indecision.
Each retest of the resistance around 1.1493 showed declining bullish momentum — with the candles showing long wicks and shrinking bodies.
Support held strong until the breakdown, showing that buyers were slowly losing strength.
⚠️ Breakdown & Bearish Signal
🔻 Breakout Characteristics:
A strong bearish candle closed below the key support zone (~1.1405), confirming the breakdown.
The candle broke through decisively with momentum, rather than a weak close or a fakeout.
Volume (if included) typically spikes during such breakdowns, indicating institutional selling.
🔁 Retest of Broken Support:
Price pulled back into the broken support zone, now acting as resistance — this is a textbook break and retest setup.
The rejection from this level confirms the validity of the breakdown and triggers the entry signal for short sellers.
🎯 Trade Setup Breakdown
✅ Entry:
After bearish retest rejection near the 1.1450–1.1460 zone.
Confirmation from bearish candles (e.g., pin bars, engulfing patterns) enhances entry confidence.
❌ Stop Loss:
Above the rectangle's resistance near 1.1493, protecting against false breakouts or a range re-entry.
Also aligns with a structural swing high, which adds logic to the placement.
🎯 Take Profit:
Target at 1.1405, based on:
Height of the rectangle projected downward.
Previous strong support zone.
Psychological round number.
⚖️ Risk-to-Reward:
Roughly 1:2 or higher — ideal for intraday or short-term swing setups.
Favorable for prop trading, scalpers, and breakout traders.
🧠 Market Psychology
The rectangle pattern represents a battle between buyers and sellers.
The breakdown suggests sellers absorbed buying pressure and gained control.
The retest confirms market memory — old support becomes new resistance, often a powerful continuation signal.
Traders who missed the initial move see the retest as a second chance to enter.
📚 Strategy & Execution Tips
Wait for Confirmation: Always allow a candle to close outside the rectangle to avoid fakeouts.
Avoid Chasing: Enter on retests, not on breakout candles, to improve entry price and reduce risk.
Watch Volatility: Breakouts during low-volume sessions (like early Asian hours) may lack follow-through.
Trail Stop Option: Once price moves toward TP, consider trailing your stop to lock in profits or partial closing.
Manage Emotions: Many traders fear missing breakouts — but disciplined entries after retests are more reliable.
📌 Final Thoughts
This EUR/USD 15-minute chart showcases a textbook rectangle pattern followed by a bearish breakout — a powerful setup for short-term traders. The rejection of the retested zone confirms seller strength and offers a high-probability trade with clearly defined risk and reward.
This setup is a great reminder that price action, structure, and patience are often more powerful than indicators. The key is to wait for confirmation and execute with discipline.
🗓 Date: April 22, 2025
⏱ Timeframe: 15-Minute (Intraday Strategy)
💱 Instrument: Euro / U.S. Dollar (EUR/USD)
📈 Pattern: Bearish Rectangle with Retest & Continuation
🔍 Market Context
The EUR/USD pair experienced a strong impulsive bullish rally, eventually leading into a consolidation phase, where the market moved sideways within a well-defined range. This created a rectangle pattern, a classic continuation or reversal structure depending on breakout direction.
In this case, the consolidation followed by a breakdown signals distribution — where large players offload their positions in anticipation of a downward move.
📊 Technical Structure & Price Action Flow
🧱 Rectangle Pattern Formation
Support Zone: ~1.1405
Resistance Zone: ~1.1493
Price moved between these horizontal zones, creating multiple swing highs and lows, confirming strong boundaries.
The rectangle shows that neither bulls nor bears had control during the range, but momentum was building.
🧠 Price Behavior Inside the Rectangle
Price bounced between support and resistance multiple times, a sign of indecision.
Each retest of the resistance around 1.1493 showed declining bullish momentum — with the candles showing long wicks and shrinking bodies.
Support held strong until the breakdown, showing that buyers were slowly losing strength.
⚠️ Breakdown & Bearish Signal
🔻 Breakout Characteristics:
A strong bearish candle closed below the key support zone (~1.1405), confirming the breakdown.
The candle broke through decisively with momentum, rather than a weak close or a fakeout.
Volume (if included) typically spikes during such breakdowns, indicating institutional selling.
🔁 Retest of Broken Support:
Price pulled back into the broken support zone, now acting as resistance — this is a textbook break and retest setup.
The rejection from this level confirms the validity of the breakdown and triggers the entry signal for short sellers.
🎯 Trade Setup Breakdown
✅ Entry:
After bearish retest rejection near the 1.1450–1.1460 zone.
Confirmation from bearish candles (e.g., pin bars, engulfing patterns) enhances entry confidence.
❌ Stop Loss:
Above the rectangle's resistance near 1.1493, protecting against false breakouts or a range re-entry.
Also aligns with a structural swing high, which adds logic to the placement.
🎯 Take Profit:
Target at 1.1405, based on:
Height of the rectangle projected downward.
Previous strong support zone.
Psychological round number.
⚖️ Risk-to-Reward:
Roughly 1:2 or higher — ideal for intraday or short-term swing setups.
Favorable for prop trading, scalpers, and breakout traders.
🧠 Market Psychology
The rectangle pattern represents a battle between buyers and sellers.
The breakdown suggests sellers absorbed buying pressure and gained control.
The retest confirms market memory — old support becomes new resistance, often a powerful continuation signal.
Traders who missed the initial move see the retest as a second chance to enter.
📚 Strategy & Execution Tips
Wait for Confirmation: Always allow a candle to close outside the rectangle to avoid fakeouts.
Avoid Chasing: Enter on retests, not on breakout candles, to improve entry price and reduce risk.
Watch Volatility: Breakouts during low-volume sessions (like early Asian hours) may lack follow-through.
Trail Stop Option: Once price moves toward TP, consider trailing your stop to lock in profits or partial closing.
Manage Emotions: Many traders fear missing breakouts — but disciplined entries after retests are more reliable.
📌 Final Thoughts
This EUR/USD 15-minute chart showcases a textbook rectangle pattern followed by a bearish breakout — a powerful setup for short-term traders. The rejection of the retested zone confirms seller strength and offers a high-probability trade with clearly defined risk and reward.
This setup is a great reminder that price action, structure, and patience are often more powerful than indicators. The key is to wait for confirmation and execute with discipline.
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.