Euro / U.S. DollarShort
Trading Plan: Bearish Breakout for EUR/USD
This trading plan focuses on a bearish breakout scenario, where the price clears the support range between 1.03560 and 1.03463, signaling a continuation downward to complete the Head and Shoulders pattern.
1. Market Context:
Current Pattern: The chart suggests the formation of a Head and Shoulders pattern, indicating a potential bearish reversal.
Key Levels:
Support Range: 1.03560–1.03463 (neckline of the pattern).
Take Profit (TP) Levels:
1.03221: Intermediate target, aligning with a key support zone.
1.02992: Final target, completing the Head and Shoulders measured move.
2. Entry Criteria:
Trigger for Entry: Place a sell stop order slightly below the support range at 1.03450.
This ensures confirmation of the bearish breakout below the neckline.
3. Stop Loss Placement:
Place the stop loss above the resistance level at 1.03600.
This protects against false breakouts and provides room for minor pullbacks.
4. Take Profit Targets:
Target 1 (Intermediate): 1.03221
Represents the first key support zone where price may pause or retrace.
Target 2 (Final): 1.02992
Represents the measured move completion for the Head and Shoulders pattern.
5.Risk-to-Reward Ratio:
Entry: 1.03450
Stop Loss: 1.03600 (15-pip risk)
Take Profit Levels:
Target 1: 1.03221 (23-pip reward) → Risk-to-Reward Ratio = 1:1.5
Target 2: 1.02992 (46-pip reward) → Risk-to-Reward Ratio = 1:3
6. Trade Execution Plan:
Monitor Volume:
A spike in selling volume below 1.03450 confirms bearish momentum.
Confirm Momentum:
Use indicators like:
RSI: Ensure it is below 50 and trending downward.
MACD: Look for a bearish crossover or increasing negative histogram bars.
1. Market Context:
Current Pattern: The chart suggests the formation of a Head and Shoulders pattern, indicating a potential bearish reversal.
Key Levels:
Support Range: 1.03560–1.03463 (neckline of the pattern).
Take Profit (TP) Levels:
1.03221: Intermediate target, aligning with a key support zone.
1.02992: Final target, completing the Head and Shoulders measured move.
2. Entry Criteria:
Trigger for Entry: Place a sell stop order slightly below the support range at 1.03450.
This ensures confirmation of the bearish breakout below the neckline.
3. Stop Loss Placement:
Place the stop loss above the resistance level at 1.03600.
This protects against false breakouts and provides room for minor pullbacks.
4. Take Profit Targets:
Target 1 (Intermediate): 1.03221
Represents the first key support zone where price may pause or retrace.
Target 2 (Final): 1.02992
Represents the measured move completion for the Head and Shoulders pattern.
5.Risk-to-Reward Ratio:
Entry: 1.03450
Stop Loss: 1.03600 (15-pip risk)
Take Profit Levels:
Target 1: 1.03221 (23-pip reward) → Risk-to-Reward Ratio = 1:1.5
Target 2: 1.02992 (46-pip reward) → Risk-to-Reward Ratio = 1:3
6. Trade Execution Plan:
Monitor Volume:
A spike in selling volume below 1.03450 confirms bearish momentum.
Confirm Momentum:
Use indicators like:
RSI: Ensure it is below 50 and trending downward.
MACD: Look for a bearish crossover or increasing negative histogram bars.
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