07.04.25 Morning ForecastPairs on Watch -
FX:EURUSD
FX:GBPUSD
FX:EURGBP
FX:GBPCAD
A short overview of the instruments I am looking at for today, multi-timeframe analysis down to what I will be looking at for an entry. Enjoy!
Priceaction
LEAP: GBPUSD Week 15 Swing Zone/LevelsFollowing last week's sharp whipsaw that ended in a downtrend due to the tariff announcement, the expectation is for the downward trend to continue. That said, price action may ultimately tell a different story.
BTC/USD Long Setup – Bullish Reversal PlayAfter a sharp drop, BTC is testing a key liquidity zone around 78.2k. The market structure suggests a potential bullish reversal, with a fakeout and recovery in sight.
📌 Trade Idea:
Entry: After confirmation of a reclaim and bullish structure break (above ~79.3k)
SL: Below recent low ~77.6k
TP: 82.8k zone
RRR: ~3.2
📅 Timeframe: 30min
📈 Bias: Counter-trend long
🔁 Watch for: Price reaction at current support and market structure shift
🚨 Wait for confirmation – patience is key in volatile conditions!
#202514 - priceactiontds - weekly update - wti crude oil futures
Good Evening and I hope you are well.
#mcl1 - wti crude oil futures
comment: Strong momentum for the bears but I have zero interest in selling where all bears for the past 2 years lost money. Not much more to say about this. Wait for strong buying and join but market will likely do some more testing of 60 first and then sideways before we can go higher. Anything above 63 is a bull surprise and could lead to a squeeze.
current market cycle: trading range on the monthly chart
key levels: 59 - 63
bull case: Bulls are at prior big support but right now we are still in the spike down phase. Market likely needs some time sideways before we can try a bounce. Bulls would do good if they stay above the 2023-12 low and keep it a higher low. Targets for bulls are the bull trend line break retest around 63.7 and the next breakout retest 2025-03 low at 65.
Invalidation is below 59.
bear case: Bears had the news crash down and now what? Are they strong enough to make lower lows below 60? I highly doubt it until it happens. Only pattern is an ugly expanding triangle and we are at the very bottom of it. Bears don’t have much reasons to sell down here but technicals only go so far for commodities. I will sit on hands for this.
Invalidation is above 63.
short term: Neutral for now but I will never sell down here since we have not traded this low for 2 years and every time we went below 65 bears lost.
medium-long term - Update from 2025-02-23: Down at support again around 60. Market has not traded below 59 since 2023 and until it happens it’s a bad trade betting on it. It’s a multi-year trading range and below 64 bulls made money, not bears.
current swing trade: None
chart update: Highlighted broken shallow bull trend line and just removed things
#202514 - priceactiontds - weekly update - nasdaq e-mini futures
Good Evening and I hope you are well.
comment: W3 has likely concluded and I expect the same price action as for W2. Market is respecting technicals precisely. Look at the chart and the obvious numbers and lines. We can always do an over- or undershoot but for now I don’t think looking for shorts after two days of crashing make any sense.
current market cycle: strong bear trend
key levels: 16000 - 19600
bull case: Bulls still running for the exits but we have fallen too much too fast and we are getting into value territory for bigger players to buy the dip. Almost nothing is ever as bad as these extreme market reactions want to trap you into. Not to the downside and certainly not to the upside but to the upside everyone is busy pounding their chest because they are such a genius for making money in a bull market. Bulls want a squeeze up to 19000, that’s about it. Bear trend line around 18800-19000 will most likely get hit over the next 2 weeks.
Invalidation is below 17000.
bear case: Same reasoning as for dax. Bears want the big bull trend line around 16500 but they won’t get there in a straight line. W4 is likely around the corner. If we stay below 18800, that would once again leave another gap open and be another show of big strength by the bears.
Invalidation is above 19100.
short term: W3 has likely concluded, shorting below 18000 is really really not a good trade unless it’s a momentum scalp. Looking to scalp some longs on the squeeze up.
medium-long term - Update from 2024-03-16: My most bearish target for 2025 was 17500ish, given in my year-end special. Clear W1 of this bear trend. Market now has to close below 19000 to confirm W3. Depending on how deep W3 goes, W5 will either reach only around 17500 or the bull trend line around 16000.
current swing trade: None
chart update: Made the bear trend clear and my expectation for W4 and W5. As always, it’s a guess.
#202514 - priceactiontds - weekly update - dax futures
Good Evening and I hope you are well.
comment: By now you could likely be crash-news-fatigued and I get it. I keep it short and technical. My base assumption is that all markets are heading for their 50% retracements from the covid lows. If no bigger positive news will stop it, we will get there with the next leg down. For now market is tough since 20500 is close enough to expect 20000 but we could very well squeeze to 21500 before more down. Do not try to catch the knife here and wait for market to clearly stop the falling. Chart is clear, mark the levels and trade small.
current market cycle: bear trend
key levels: 20000 - 21500
bull case: Bulls are at big support with 20000 and the bull trend line from 2023-10. That bull trend line can be drawn many different ways and I just presented one possibility and you never know which algos respect what version the most until market has turned. I do think the selling is overdone very much and the short squeeze is around the corner. Targets above are the obvious ones. 21000 and then maybe 21500 but not much more for now.
Invalidation is below 19900.
bear case: Bears need to reduce risk and lock in some profits I think. I highly doubt market can go to 22000 but it’s not impossible and bears don’t want to see their windfall profits disappear again. The odds of continuing straight down after -10% are low. Very very low. Market could likely do some sideways first. Bears want 20000 and there I expect most to take big profits and a bigger bounce. My wave count is most likely off since I can not see this selling ending here above 20000. The covid low bull trend line is around 19500 and too obvious to not get hit over the next weeks.
Invalidation is above 21600.
short term: Neutral but I expect a big short squeeze next week. 21500 is my target for the bulls but most likely outcome for next days is chop between 20000 and 21000
medium-long term from 2024-03-16: Clear new bear trend and targets were given end of 2024. If this hits 19500, you buy with both hands stocks and etfs and do not look at them for months or years. Generational buying opportunity.
current swing trade: Out of most shorts. Next swing will be for W5 but I want an entry closer to 21500 or 22000 but 22000 is likely too much and we could not get there.
chart update: Big bear gap won’t stay open in that size. Big bear trend line above is the most important line on this chart besides the bull trend line from the covid low.
#202514 - priceactiontds - weekly update - bitcoinGood Evening and I hope you are well.
#btcusd - bitcoin
comment: The move I was writing and have been expecting for multiple weeks started today and 75k is the target. I won’t repeat all of it. Chart is clear and now it’s on bears to make meaningful lower lows. Below 70k you will likely see some panic.
current market cycle: bear trend
key levels: 70k - 90k
bull case: Bulls tried and failed under 90000. Now their last hope is to keep it above 75000 or risk going down to 70000 or below. I absolutely have nothing for them besides praying that 75000 holds.
Invalidation is below 70k.
bear case: Bears have all the arguments now and the chart is clear as day. Would not be the first time a market would do the opposite of what’s expected but you will not make money in the long run if you only bet on the low probability things happen. Maybe you can but you have to be S-Tier trader amongst traders. Much easier to follow the trend here. 75000 was my big target and I hope we crash to 69000.
Invalidation is above 90k.
short term: Full bear for 75000 or lower.
medium-long term - Update from 2025-02-23: 75000 is still my biggest target for 2025. It’s happening. 70k/75k and then I expect a bigger bounce first. Then we will see if we can go lower or not. For now it’s very low probability that the big bull trend line from 2023-10 breaks anytime soon.
current swing trade: Short since 85000. Stop is 89000 no matter where you go short.
chart update: Removed one minor broken bear trend line.
GOLD(XAUUSD) -Weekly Forecast,Technical Analysis & Trading Ideas💡 Daily Timeframe:
As the 4CastMachine AI forecasted, the price began its decline towards the $3,000 support.
At the support area of 3000, the up trend line will also prevent further declines.
If this area is broken, the price will decline to the support area of 2789.95.
This area, which was previously a major resistance, will become a major support, creating a good buying opportunity.
So, given the long-term uptrend, we can use this area as a long-term BUY ZONE.
OANDA:XAUUSD TVC:GOLD
💡 H4 Timeframe:
Gold started its decline when it hit the 3167 resistance.
The uptrend is broken, and price is in an impulse wave.
This decline will continue, but the support area of 3000 and uptrend line could trigger a resumption of uptrend.
💡 H1 Timeframe:
If the price enters the sell zone with a corrective wave, we will wait for the price to reject from that area.
If we see a price rejection from the sell zone, we can sell.
H1 Forecast:
Correction wave toward the Sell Zone
Another Downward Impulse wave toward Lower TPs
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GBPUSD FORECASTIn this analysis we're focusing on 4H time frame for GBPUSD. As we know that market trend was bullish and today I'm looking for a buy side opportunity. According to my analysis, if the market price wants to continue its move to the upside, it will need to first retest the key levels drawn on the chart before it can continue its upward movement. Let's see what happens and which opportunity market will give us. Always remember when price reaches our key levels wait for confirmation. After confirmation execute your trades.
Always use stoploss for your trade.
Always use proper money management and proper risk to reward ratio.
This is just my analysis or prediction.
#GBPUSD 4H Technical Analyze Expected Move.
GBPJPY TODAY FORECASTIn this forecast we're analyzing 2H time frame for GBPJPY. Today I'm looking for a potential buy trade setup. According to my analysis and strategy when price enters in my key levels as shown in the chart and give any bullish confirmation like candlestick pattern or price action. After taking confirmation we'll trigger our trade. Confirmation is most important part of this analysis.
Always use stoploss for your trade.
Always use proper money management and proper risk to reward ratio.
This is just my analysis. Further updates related this analysis will posted soon once price reach our levels.
#GBPJPY 2H Technical Analysis Expected Move.
#BTC/USD ANALYSIS. (BULLISH)Bitcoin Price Action Analysis. The Next Big Move?
Bitcoin is moving within an ascending channel, showing strong bullish momentum! However, a key decision point is approaching as the price nears a critical support zone (highlighted in blue). If BTC holds above this level, we could see a strong push towards the $91,500 resistance and potentially break into the $94,700 range.
A well structured risk-to-reward setup is in play, with a potential bullish breakout targeting new highs. Will BTC sustain its momentum, or will we see a retracement before the next leg up? Stay sharp and trade wisely! We will execute our trades only after receiving bullish confirmation.
Use proper stoploss and proper money management.
This is just my analysis. Observe the behavior of price how it will react.
#BTCUSD 2H Technical Analysis Expected Move.
EUR/JPY Falling Wedge Breakout | Bullish Potential Ahead🔍 Chart Overview: EUR/JPY – Daily Timeframe
This chart illustrates the price action of the Euro against the Japanese Yen and highlights a Falling Wedge Pattern developing over several months. This is a classic bullish continuation/reversal setup, supported by key technical levels.
📐 1. Chart Pattern: Falling Wedge
A falling wedge is a bullish chart pattern that occurs when the market consolidates between two downward-sloping trendlines.
Characteristics Seen in the Chart:
Converging Trendlines: The upper (resistance) and lower (support) boundaries are both sloping downward, indicating a narrowing price range.
Volume (not shown) usually decreases during the formation, followed by a surge on breakout.
Multiple Touch Points: The price action respects both boundaries multiple times, confirming the pattern's validity.
🏛️ 2. Key Levels
✅ Support Level (Demand Zone):
Marked around 156.000 – 158.000
Multiple bounces from this area, indicating strong buying interest.
Aligned with the lower wedge trendline and historical price reaction zones.
🚫 Resistance Level (Supply Zone / Breakout Zone):
Around 164.500 – 166.000
Price repeatedly failed to break this level, confirming it as a strong supply area.
Confluence of horizontal resistance and the upper wedge boundary.
📊 3. Trade Setup
💼 Entry Strategy:
Confirmation Buy: Enter a long position upon a daily candle close above the wedge resistance (around 166.000).
Aggressive traders may consider an earlier entry near the wedge’s support with a tight stop.
🎯 Target:
The projected target is 172.962, calculated based on the height of the wedge pattern added to the breakout point.
This aligns with a previous swing high area, serving as a logical profit-taking zone.
🛑 Stop Loss:
Positioned at 155.576, just below the key support zone.
This allows the trade room to breathe while protecting against a full pattern failure.
⚖️ 4. Risk Management
Risk-to-Reward Ratio (RRR): Target around 172.962 and Stop Loss at 155.576 offer a favorable RRR of approximately 2.5:1 or more, depending on entry.
Position Sizing: Use appropriate lot size based on your account risk tolerance (e.g., 1-2% of equity per trade).
📅 5. Timeframe Outlook
Medium to Long-Term Setup: Since this is a daily chart, the trade may take weeks to months to fully play out.
Patience and proper trade management are essential.
🔎 6. Additional Notes
Retest Opportunity: If price breaks out, look for a retest of the resistance zone as new support before continuation to the upside.
Fundamental Factors: Keep an eye on EUR and JPY economic data, ECB and BoJ policy announcements, and global risk sentiment, which can influence the pair.
🧭 Professional Takeaway
This is a textbook bullish falling wedge pattern within a well-defined technical structure. The chart provides:
A clear pattern breakout level,
Strong historical support/resistance zones,
A defined risk management plan,
And a realistic price target based on technical projection.
If you are a swing trader or position trader, this setup offers a high-probability opportunity with favorable risk-reward dynamics—provided a breakout is confirmed.
EUR/GBP Analysis Double Bottom Breakout Toward TargetOverview of the Chart
This chart displays a EUR/GBP daily timeframe setup, highlighting a Double Bottom Pattern, a well-known bullish reversal formation. The pattern consists of two consecutive lows at a similar price level, followed by a breakout above a key resistance zone. This setup suggests a potential trend reversal from bearish to bullish.
Technical Analysis Breakdown
1. Double Bottom Formation (Reversal Signal)
Bottom 1: The first low was established after a prolonged downtrend, where the price found support and bounced higher.
Bottom 2: Price revisited the same support area but failed to break lower, indicating that sellers are losing strength and buyers are stepping in.
A double bottom pattern signals that the asset is forming a strong base and is likely to move higher after breaking the neckline (resistance level).
2. Support and Resistance Levels
Support Level (~0.8322):
This level acted as a demand zone, preventing further downside.
It marks the price area where buyers accumulated positions, leading to a reversal.
Resistance Level (~0.8500):
This level previously acted as a supply zone, where sellers controlled the price.
A breakout above this level is crucial to confirm the bullish trend continuation.
3. Breakout Confirmation & Retest Expectation
The price successfully broke above the resistance zone, confirming a bullish reversal.
A potential retest of the broken resistance (now turned support) could occur before further upside movement.
Traders often wait for this retest to confirm that the breakout is genuine before entering a position.
4. Price Target Projection
Based on the measured move strategy, the expected target is calculated by measuring the height of the double bottom pattern and projecting it above the breakout zone.
Target Price: 0.8742, aligning with historical resistance levels.
5. Stop Loss Placement
Stop loss at ~0.8322 (below the double bottom support).
This ensures risk is managed in case of an invalid breakout or a false move.
Trading Plan & Execution Strategy
📌 Entry Strategy:
✅ Breakout Entry: Buy after the breakout above resistance.
✅ Retest Entry: Wait for a pullback to the previous resistance (now support) before entering.
📌 Risk Management:
🔹 Stop Loss: Placed below the recent support at 0.8322 to limit downside risk.
🔹 Take Profit: First target at 0.8742 based on the double bottom structure.
📌 Market Outlook:
A successful breakout and bullish momentum could push prices toward the target.
If the price fails to hold above the breakout zone, a deeper retracement could occur before continuing higher.
Conclusion
The EUR/GBP pair has formed a bullish double bottom reversal pattern, signaling a potential uptrend continuation. The key levels to watch include 0.8500 (resistance turned support) and 0.8742 (target projection). Traders should monitor price action around the breakout zone for confirmation and consider risk management strategies before entering a position.
BTC/USD Weekly Analysis – Cup and Handle Breakout Toward Target🔍 Overview
The chart displays a classic Cup and Handle pattern on the weekly timeframe, a well-established bullish continuation formation often found in long-term uptrends. This pattern, combined with major technical confluences such as trendline support and strong horizontal levels, provides a high-conviction long setup with defined risk and reward.
☕ 1. The Cup Formation
Timeframe: Mid-2021 to early 2024
Shape: Rounded bottom, a hallmark of slow accumulation.
After reaching an all-time high in late 2021, BTC entered a bear market, dropping sharply and eventually bottoming out between $15,000–$20,000.
A gradual recovery followed, forming a wide and symmetrical base—indicating accumulation by institutional and long-term holders.
This phase represents a shift in market sentiment, from bearish to neutral, and eventually bullish, as buyers stepped in around key demand zones.
🔧 2. The Handle Formation
Timeframe: Early 2024 to late 2024
After reclaiming its previous high resistance area near $69,000–$75,000, BTC formed a short-term consolidation or pullback, creating the "handle" portion of the pattern.
The handle appeared as a descending channel, a healthy correction that typically precedes a breakout in this pattern.
This correction also aligned with a trendline retest, offering dynamic support and further strengthening the pattern's reliability.
💥 3. Breakout Confirmation
The breakout from the handle occurred above the descending resistance of the handle pattern.
Weekly candles showed strong bullish momentum, backed by rising volume and rejection from lower trendline levels.
BTC is now trading near $83,000, just above the trendline, confirming both pattern validation and support holding.
🎯 4. Target & Projection
The measured move of the Cup and Handle pattern is calculated by measuring the depth of the cup and projecting that from the breakout point.
Cup Depth: Approximately $60,000
Breakout Point: ~$75,000–$80,000
Target Price: ~$123,000–$125,000
This target aligns with historical Fibonacci extensions and psychological round-number resistance.
🔐 5. Key Levels
Support Zone: $20,000–$30,000 (multi-year accumulation base)
Trendline Support: Drawn from 2022 lows, holding well through handle correction
Resistance Zone: $100,000 psychological barrier
Stop Loss: Placed just below trendline and swing low at $76,340 to protect against downside volatility
🧠 Why This Setup is Strong
Multi-year Base Formation (2.5+ years of consolidation)
Pattern Reliability: Cup and Handle is a well-tested bullish continuation pattern
Confluence of Support: Both horizontal and dynamic trendline support levels
Momentum Structure: BTC has resumed higher highs and higher lows
Volume: Breakout occurred with a noticeable spike in volume, a key validation point
🏁 Conclusion
Bitcoin is displaying strong bullish potential through a large-scale Cup and Handle pattern. This technical setup is supported by:
Long-term accumulation
Structural breakout
Strong support levels
A clear roadmap toward $120K+ targets
As long as BTC maintains above the trendline and doesn't invalidate the handle's structure, the bulls remain firmly in control.
XAU/USD Bullish Pennant Breakout - Trade Setup Toward Target📊 Overview:
This 4-hour chart of Gold Spot (XAU/USD) presents a clean bullish pennant breakout followed by a corrective pullback to key support, offering a high-probability trading setup for bullish continuation traders.
Gold recently surged above the psychological $3,000 level, but after testing the previous resistance zone / ATH, it retraced back into a critical confluence of support. From a technical perspective, the structure remains bullish, supported by strong trendline dynamics, clean price action, and a well-defined pennant formation.
🔍 Step-by-Step Breakdown:
1. Bullish Pennant Formation
A bullish pennant is a continuation pattern that typically occurs after a strong upside rally (the "flagpole"). In this chart:
The flagpole began around March 13, with gold moving vertically from ~$2,630 to ~$2,950.
This was followed by consolidation between March 19–27, forming a symmetrical triangle pattern with converging trendlines (the pennant body).
Volume (if added) would typically decrease during this consolidation phase.
On March 27–28, price broke above the pennant, confirming the bullish bias.
📌 This breakout signals that buyers are ready to resume control after taking a breather.
2. Rally & Retest Phase
Following the breakout:
Price surged to challenge the resistance zone and all-time high (ATH) area, marked between $3,150 – $3,160.
A natural pullback occurred due to profit-taking and overbought conditions.
This retracement brought price back into the support zone at ~$3,000, intersecting perfectly with:
The rising trendline from the pennant breakout
A horizontal demand zone (former resistance turned support)
A key psychological level ($3,000)
💡 This zone acted as a confluence area, attracting buyers and creating a strong bounce — visible as a bullish engulfing candle.
3. Support & Resistance Analysis
✅ Support Level:
$2,990 – $3,010
Marked by previous highs before the breakout
Validated by the trendline and price reaction
🚫 Resistance / ATH Level:
$3,150 – $3,160
Historic resistance zone that capped the recent rally
Price must break this level for further continuation toward the target
4. Trendline Dynamics
The dotted trendline acts as a rising support structure.
Trendlines in bullish continuations are crucial as they confirm upward momentum.
As seen on the chart, price respected the trendline during the recent dip and bounced with strong momentum — a bullish signal.
5. Trade Setup & Risk Management
A trade based on this structure should follow strict risk-to-reward discipline.
🛒 Entry Zone:
Ideal re-entry lies between $3,030 – $3,040, after confirming the bounce from support.
❌ Stop Loss:
Below $2,976, which is under the support zone and trendline. If price breaches this level, the pattern is invalidated.
🎯 Target:
Measured move (height of the flagpole) projected from breakout zone gives us a target of around $3,221.
The chart also marks this clearly as the "Target" zone.
📈 Risk-to-Reward Ratio: Approximately 1:3, which is attractive for swing trades.
6. Market Psychology & Trader Sentiment
The bullish pennant represents temporary indecision, but ultimately market confidence remains strong.
The pullback to support reflects healthy profit-taking, not bearish reversal.
The bounce from support shows buy-the-dip mentality, a sign that bulls remain in control.
7. Macro & Fundamental Backdrop
While the chart is technical, it's wise to factor in macro catalysts:
🏦 Federal Reserve policy: If the Fed holds or cuts rates, gold typically rallies due to lower opportunity cost.
📉 Inflation Data: Rising inflation or expectations can push gold higher as a hedge.
🌍 Geopolitical tensions: Conflicts or economic instability drive safe-haven flows into gold.
Staying updated on these events can help validate or hedge your technical outlook.
✅ Conclusion:
This chart presents a technically sound bullish continuation setup backed by:
A breakout from a bullish pennant
A retest and bounce from a confluence support zone
A clearly defined risk (stop loss) and reward (target)
Traders looking for medium-term opportunities in XAU/USD can consider this as a high-probability setup with logical structure and strong momentum potential.
🔔 TradingView Tag Suggestions:
#XAUUSD #Gold #TechnicalAnalysis #BullishPennant #PriceAction #SwingTrade #Forex #TradingSetup #Commodities #GoldBreakout
Mastering Market Trends: Your Guide to Clearer Trading DecisionsTrends shape every decision you make in the markets, even if you’re unaware of it. Understanding how to identify and adapt to these market phases is your foundational skill - one that separates successful traders from the rest.
Today, let’s simplify and clarify the three essential types of market trends. By mastering this, you’ll approach trading decisions with more confidence and clarity.
⸻
📈 1. Uptrend – Riding the Bull
• What is it?
An uptrend is like climbing stairs upward. Each step (low) is higher than the previous one, and every leap (high) sets a new peak.
• What drives it?
Buyers dominate, optimism rules, and demand pushes prices upward.
• Trading tip:
Identify support levels and look for retracements as potential entry points. Be cautious about chasing prices that have moved too far without a pullback.
⸻
📉 2. Downtrend – Navigating the Bearish Territory
• What is it?
Visualize going down a staircase. Each step down (low) surpasses the previous one, and every upward bounce (high) falls short of the prior peak.
• What drives it?
Sellers control the market, bearish sentiment takes over, and supply outweighs demand.
• Trading tip:
Look for resistance areas to identify potential short entries or wait patiently for signs of a reversal if you’re bullish.
⸻
➡️ 3. Sideways Market – The Calm Before the Storm
• What is it?
Imagine a tug-of-war with evenly matched teams. The price moves back and forth in a narrow range without breaking decisively higher or lower.
• What drives it?
Uncertainty, indecision, or equilibrium between buyers and sellers.
• Trading tip:
Stay patient! Either look to trade range extremes (buying support and selling resistance) or wait for clear breakout signals to catch the next big move.
⸻
🔍 Pro Tip for Trend Analysis:
• Multi-timeframe analysis is key: Always check higher timeframes (weekly, daily, or hourly) to confirm the primary trend. Don’t let short-term noise mislead your trading decisions.
⸻
🚀 Why It Matters:
Aligning your strategies with the correct market trend significantly improves your odds. It’s like sailing with the wind at your back instead of battling against it.
Now, tell us in the comments: Which trend type do you find most challenging to trade?
Trade smarter. Trade clearer.
Mastering RSI Divergence: A Complete Guide to Trend ReversalsWhat Are Divergences?
In this guide, we will explore the concept of divergence and how it can be effectively utilized alongside the Relative Strength Index (RSI), one of the most popular momentum indicators in technical analysis. Divergence occurs when the price of an asset moves in the opposite direction of an indicator, such as the RSI. Understanding RSI divergence can be a powerful tool for identifying potential trend reversals or continuations. In this guide, we'll delve into the various types of divergence that can occur with the RSI and how to incorporate them into your trading strategy.
Types of Divergences?
There are three primary types of divergence: bullish, bearish, and hidden divergence. Each signals a distinct market condition and potential outcome, and understanding these nuances is key to using divergence effectively in your trading.
1. Bullish Divergence Bullish divergence happens when the price of an asset makes a lower low, while the RSI forms a higher low. This indicates that although the price is declining, momentum is weakening. The failure of the RSI to confirm the new low in price suggests that selling pressure is diminishing, potentially signaling that a reversal to the upside could occur. Essentially, the market is losing its downward momentum, setting the stage for a potential bullish move.
2. Bearish Divergence Bearish divergence occurs when the price forms a higher high, but the RSI forms a lower high. This indicates that although the price is rising, momentum is weakening. It suggests that the uptrend may be losing steam, signaling that a potential reversal to the downside could be on the horizon. As the price continues higher, but the RSI fails to confirm the new highs, it may indicate that the market is becoming overextended and ready for a correction.
3. Hidden Divergence Hidden divergence differs from regular divergence in that it signals a continuation of the existing trend, rather than a reversal. It typically occurs during pullbacks or retracements in a strong trend. Hidden divergence can appear in both uptrends and downtrends, providing traders with an indication that the prevailing trend is likely to continue after the short-term retracement is over. This type of divergence serves as a confirmation of trend strength and helps traders stay in profitable positions during market pullbacks.
Why Are RSI Divergences a Powerful Tool?
RSI divergence is a powerful tool in trading because it offers early insights into potential trend reversals or shifts in momentum before these changes are fully reflected in price movements. By recognizing divergence, traders can anticipate shifts in market sentiment and make timely decisions. One of the main reasons RSI divergence is so effective is that it serves as an early warning system. It signals when the momentum behind a price trend, whether up or down, is starting to weaken.
For example, in a strong uptrend, if prices continue to make new highs, but the RSI fails to reach new highs, this could signal that the buying momentum is losing strength, even though the price is still rising. This divergence indicates that a reversal or pullback might be imminent, allowing traders to exit their positions or prepare for a potential shift in market direction. Understanding this early warning can provide traders with an edge, helping them avoid being caught in the late stages of a trend and positioning themselves ahead of a change.
How to Trade RSI Divergences?
When the price makes a higher high but the RSI fails to confirm with a higher high, this is known as bearish divergence. While this situation suggests weakening momentum, it doesn’t necessarily mean a correction is imminent. The price may continue to rise for some time, and eventually, the RSI could catch up and make a higher high in line with the price action. Essentially, the market could remain in an uptrend, and the RSI could still align with the price over time.
This highlights the importance of not jumping to conclusions solely based on RSI divergence. Divergence can act as a useful warning, but it should not be relied upon as a definitive signal of a trend reversal. To increase the reliability of the signal, traders should wait for additional confirmation, such as a candlestick pattern indicating a potential trend reversal. Candlestick patterns like engulfing patterns, doji candles, or shooting stars at key support or resistance levels can provide stronger evidence that the trend may be about to change.
Therefore, it’s wise to wait for a more comprehensive confirmation from price action before making a move, rather than acting on divergence alone. Combining RSI divergence with other technical tools, such as candlestick patterns or chart patterns, can help increase the accuracy of your trade decisions.
Conclusion:
Divergence is a powerful tool that provides valuable insights into potential trend reversals or continuations. By understanding the different types of divergence and knowing how to identify them, traders can make more informed decisions. However, divergence should always be used in conjunction with other technical analysis tools to enhance the accuracy of your strategy. With practice, patience, and proper risk management, divergence trading can become a profitable strategy for identifying key market turning points. Whether you are seeking trend reversals or confirming ongoing trends, RSI divergence can be an essential component of your trading toolkit.
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EUR/GBP (1H) – Rising Wedge Breakdown & Short Trade Setup1. Overview of Market Structure
The EUR/GBP pair is forming a Rising Wedge Pattern, a well-known bearish reversal formation, which suggests that the current uptrend may soon reverse into a downtrend. The price has been moving within a tightening range, making higher highs and higher lows, but the upward momentum appears to be weakening.
A breakdown from this wedge is a strong bearish signal, indicating that sellers are gaining control, and a significant price drop is expected.
2. Chart Pattern: Rising Wedge – Bearish Reversal
A Rising Wedge is a pattern that occurs when price moves upward within a contracting range. This pattern typically forms after an uptrend and suggests that bullish momentum is slowing down.
Characteristics of the Rising Wedge in This Chart:
The price has tested the upper resistance zone multiple times, but each attempt has resulted in a rejection.
The lower support trendline has been tested frequently, showing that buyers are losing strength.
The breakdown of the wedge signals a strong bearish move, with price expected to drop toward key support levels.
This pattern becomes valid once the price breaks below the lower trendline, confirming the bearish outlook.
3. Key Technical Levels & Zones
A. Resistance Zone (0.84853) – Strong Supply Area
Marked as a Resistance Zone, where price has struggled to break through.
Sellers have stepped in around this level multiple times, preventing any further bullish movement.
Acts as a major stop-loss level for bearish trades, as a breakout above this zone could invalidate the setup.
B. Support Zones (Potential Take-Profit Targets)
1st Support Level (TP1) – 0.82539
This level has previously acted as strong support, where buyers have entered the market before.
A short-term pullback or consolidation may occur here.
2nd Support Level (TP2) – 0.81332
This is the final bearish target, marking a key demand zone from where price has bounced in the past.
If bearish momentum continues, price could reach this level, making it an ideal take-profit zone for swing traders.
4. Trading Strategy & Execution
A. Entry Strategy
A short trade is ideal after the price breaks below the rising wedge pattern. There are two possible entries:
Aggressive Entry:
Enter immediately after the breakout of the lower trendline, anticipating strong downside momentum.
Higher risk as price might retest the trendline before moving down.
Conservative Entry:
Wait for a retest of the broken trendline before entering short.
This confirms the breakdown, reducing false breakout risks.
B. Stop-Loss Placement
Stop-loss should be placed just above the resistance zone (0.84853).
This prevents being stopped out by minor pullbacks before the actual move happens.
C. Take-Profit Targets
TP1: 0.82539 (First major support level – potential profit booking area)
TP2: 0.81332 (Final bearish target – strong demand zone)
5. Risk Management & Trade Management
Risk-to-Reward Ratio (RRR)
This trade offers a high RRR, making it an attractive setup.
The stop-loss is small compared to the potential downside move.
Trailing Stop Strategy
A trailing stop can be used to lock in profits as price moves lower.
If price reaches TP1, move stop-loss to breakeven to secure capital.
If price reaches TP2, close the trade for maximum profit.
Exit Strategy
Exit early if price fails to break key support zones.
Monitor price action around TP1 & TP2 for signs of reversal.
6. Sentiment Analysis & Market Context
Bearish Confirmation:
Breakdown from the wedge signals bearish sentiment in the market.
If price fails to sustain above support zones, further downside is likely.
News & Fundamentals:
Major economic events or interest rate decisions could impact EUR/GBP volatility.
Traders should check for UK & Eurozone news before entering the trade.
7. Conclusion – Bearish Outlook
The Rising Wedge breakdown is a strong short-selling opportunity.
Confirmation is key: Enter short after the breakdown, use proper risk management, and aim for TP1 & TP2.
If price invalidates the pattern by breaking above 0.84853, the trade setup should be reconsidered.
This setup provides a high-probability bearish trade with a well-defined stop-loss and risk-to-reward ratio.
EUR/USD – Bullish Flag Pattern & Trade SetupTechnical Analysis & Trade Plan for TradingView Idea
This chart illustrates a Bullish Flag Pattern on the EUR/USD 1-hour timeframe, suggesting a potential continuation of the prevailing uptrend. Below is a detailed breakdown of the market structure, key levels, and a professional trading strategy.
📌 Chart Pattern: Bullish Flag Formation
The Bullish Flag is a continuation pattern that forms after a strong upward price movement, followed by a short period of consolidation within a downward-sloping channel. It signals a brief pause before the trend resumes.
Flagpole: The sharp price increase before the consolidation.
Flag: The corrective downward movement forming a small parallel channel.
Breakout Potential: A confirmed breakout above resistance could lead to a further bullish rally.
🔍 Key Technical Levels & Market Structure
🔵 Resistance Level (Supply Zone)
The upper boundary of the flag pattern acts as resistance.
A breakout above this level could trigger a strong buying opportunity.
🟢 Support Level (Demand Zone)
The lower boundary of the flag provides support.
Price is currently testing this zone, which is a critical decision point.
🎯 Target Price: 1.14544 (Projected Move)
The price target is calculated based on the height of the flagpole added to the breakout point.
This aligns with a previous significant resistance area.
📈 Trading Strategy & Execution Plan
✅ Entry Criteria:
A confirmed breakout above the flag's resistance level with a strong bullish candlestick.
Increased trading volume supporting the breakout.
🚨 Risk Management:
Stop Loss: Placed below the support zone of the flag to manage risk in case of a false breakout.
Take Profit Target: At 1.14544, aligning with the measured move of the flag pattern.
📊 Trade Confirmation Indicators:
RSI (Relative Strength Index): A reading above 50 confirms bullish momentum.
Moving Averages (50 EMA/200 EMA): A bullish crossover would strengthen the buying signal.
Volume Analysis: A breakout should be accompanied by high trading volume for confirmation.
⚠️ Potential Risks & Alternative Scenarios
Fake Breakout: If the price breaks out but lacks volume, it could be a false signal.
Bearish Reversal: If price breaks below the support zone, the bullish flag setup becomes invalid.
Market Sentiment Shift: Unexpected news events can impact price movement.
📝 Summary
The EUR/USD pair has formed a Bullish Flag Pattern, signaling a possible continuation of the uptrend.
A breakout above the resistance level would confirm the pattern and provide a strong buying opportunity.
Risk management is essential, with a stop loss placed below the support level.
Final Target: 1.14544, based on the flagpole’s measured move.
💡 Conclusion: A well-structured breakout above resistance could lead to a bullish rally toward 1.14544. However, patience and confirmation are key before entering the trade.
JPY/USD – Rising Wedge Breakdown & Bearish Trading Setup1. Market Structure & Technical Pattern:
The Japanese Yen (JPY) against the U.S. Dollar (USD) has been exhibiting a clear Rising Wedge Pattern over the past few months. This is a classic bearish reversal pattern, indicating that buying momentum is gradually weakening, and a strong decline is likely to follow.
Formation of the Rising Wedge:
The price has been making higher highs and higher lows, confined within two converging trendlines (black lines).
The lower boundary (support trendline) has been consistently acting as a dynamic support level.
The upper boundary (resistance trendline) has been limiting further upward movement, indicating exhaustion of buying pressure.
Breakout Confirmation:
The price action tested the resistance zone multiple times but failed to sustain bullish momentum.
A strong rejection from the upper resistance level led to a sharp sell-off, causing a breakdown of the support trendline.
Once the price broke below the wedge, selling pressure intensified, confirming the trend reversal.
2. Key Technical Levels & Zones:
Resistance Level (0.006895):
The price previously struggled to break above this resistance zone, forming a strong supply area where sellers dominated.
This level aligns with the upper boundary of the rising wedge, making it a significant turning point.
The rejection from this zone initiated the bearish breakdown.
Support Level (Broken – 0.006650):
This level acted as a strong demand zone, preventing further downside movement during the wedge formation.
However, once the price broke below this level, it confirmed the end of the uptrend and the beginning of a downtrend.
This level may now act as a new resistance (role reversal principle).
Stop Loss Placement (Above 0.006895):
A logical stop-loss is placed just above the resistance level to protect against a potential invalidation of the bearish setup.
If the price closes above this level, the bearish thesis would be invalidated.
3. Trading Execution & Risk Management:
Sell Entry Strategy:
Traders looking for short positions should enter after a confirmed break below the wedge’s support.
A potential pullback (retest) to the broken trendline could offer an additional shorting opportunity.
The retest would confirm the previous support turning into resistance before a continuation of the downtrend.
Take Profit Targets (TP1 & TP2):
TP1 (0.006481):
This level represents a strong demand zone where short-term buyers may step in.
Traders may choose to book partial profits here.
TP2 (0.006251):
This is a deeper support level and the final target for this trade setup.
If the price sustains bearish momentum, it is likely to reach this level before stabilizing.
Risk-to-Reward Ratio Consideration:
This setup offers a high probability short trade with an attractive risk-to-reward ratio.
The stop-loss is well-defined, minimizing potential losses while maximizing profit potential.
4. Expected Price Movement & Projection:
Short-term Outlook:
A possible pullback to the broken wedge (previous support now acting as resistance) before continuation lower.
If the price retests and rejects the 0.006650 level, expect acceleration in the downtrend.
Medium-term Outlook:
If the price reaches TP1 (0.006481) and breaks below, it increases the probability of hitting TP2 (0.006251).
A bearish trend continuation could form, potentially leading to further downside levels.
Invalidation Scenario:
If the price closes above the stop-loss level (0.006895), the bearish setup is invalidated, and a bullish breakout could follow instead.
5. Conclusion & Trading Plan:
The rising wedge breakdown signals a shift from bullish to bearish market sentiment.
Traders should look for short entries after a confirmed breakdown or wait for a pullback before executing trades.
The risk-to-reward ratio makes this a strong high-probability trade setup.
Following the plan with strict stop-loss placement ensures risk is controlled while maximizing profit potential.
6. Summary & Key Takeaways:
✅ Pattern: Rising Wedge (Bearish Reversal)
✅ Breakout Direction: Downside
✅ Resistance Level: 0.006895
✅ Support Levels: 0.006650 (broken), 0.006481 (TP1), 0.006251 (TP2)
✅ Stop-Loss Placement: Above 0.006895
✅ Profit Targets: TP1 – 0.006481, TP2 – 0.006251
✅ Trade Bias: Bearish
Detailed Analysis of Silver (XAG/USD) – Double Top BreakoutThe chart represents a technical analysis of Silver (XAG/USD) on the daily timeframe (1D). A Double Top pattern, one of the most reliable bearish reversal formations, is developing. This signals a potential downtrend, with key price levels and trendlines confirming weakness in bullish momentum. Below is a full breakdown of the pattern, price action, and trading setup.
1️⃣ Pattern Formation: Double Top – Bearish Reversal
A Double Top pattern occurs when the price reaches a resistance level twice, failing to break higher. It indicates a shift from a bullish trend to a bearish one.
🔹 Characteristics of the Double Top in This Chart:
First Peak (Top 1 - Resistance at ~$34.57):
The price made a strong move upward, reaching a high near $34.57.
Selling pressure at this level pushed the price downward, forming a support level near $30 (Neckline).
Pullback & Temporary Support (~$30 Neckline):
Buyers stepped in at the support zone, causing a bounce back towards resistance.
This level acted as strong demand, preventing further decline temporarily.
Second Peak (Top 2 - Rejection at Resistance Again):
Price attempted to break above the previous peak but failed.
This failure to form a higher high confirms the presence of strong sellers.
The second rejection strengthens the resistance level at $34.57, signaling exhaustion in buying momentum.
Break of the Trendline Support (Bearish Shift):
A previously ascending trendline (black dashed line) was providing support for the uptrend.
Price broke below this trendline, indicating a possible trend reversal from bullish to bearish.
2️⃣ Key Technical Levels & Trading Setup
🔸 Resistance Zone (~$34.57 - Stop Loss Area)
This is the major resistance level, tested twice and confirmed as a supply zone.
A move above $34.57 would invalidate the bearish pattern, making this an ideal stop-loss level.
🔹 Support Level / Neckline (~$30 - Breakdown Confirmation)
The neckline acts as a critical level. If the price breaks below $30, the Double Top formation is confirmed.
If the price retests this level from below and rejects (fails to reclaim it as support), it becomes a strong short entry signal.
🔻 Target Price (Projected Move - $23.01)
The target is based on the measured move rule of a Double Top:
Distance from resistance ($34.57) to neckline ($30) ≈ $4.57.
Projecting this same distance downward gives a target of ~$23.01.
This aligns with historical demand zones, increasing the probability of price reaching this level.
3️⃣ Trading Plan: Short Setup Execution
🔽 Short Entry (Breakdown Confirmation Below $30)
Ideal entry point is after the neckline breaks and confirms resistance upon a retest.
A breakdown with strong volume enhances the validity of the setup.
🚨 Stop Loss Placement (Above $34.57 Resistance Level)
Placing a stop above the second peak ($34.57) ensures protection against invalidation.
If price moves back above this level, the pattern fails, indicating a potential return to bullish momentum.
🎯 Target Price ($23.01) – Measured Move Projection
The price target aligns with the pattern structure and historical support levels.
Traders can take partial profits at intermediary levels ($27–$26) before full target realization.
4️⃣ Additional Confirmation Factors – Confluence for Bearish Bias
1️⃣ Momentum Indicators: RSI & MACD Bearish Signals
If RSI (Relative Strength Index) drops below 50, it confirms weakening bullish momentum.
A MACD bearish crossover (signal line crossing below the MACD line) would further validate the downtrend.
2️⃣ Volume Analysis – Breakout Confirmation
A high volume breakout below $30 confirms selling pressure.
Low-volume breakdowns can lead to false breakouts, making volume a crucial factor to watch.
3️⃣ Fundamental Factors – Macro Outlook on Silver (XAG/USD)
Silver prices are influenced by interest rates, inflation, and USD strength.
If USD strengthens, silver could face more selling pressure, aligning with this bearish technical setup.
Any hawkish monetary policy statements could accelerate the downside movement.
5️⃣ Risk Management & Alternative Scenarios
✔️ Ideal Risk-Reward Ratio
Risk: Stop loss at $34.57 (~4.5% above entry)
Reward: Target at $23.01 (~23% move)
Risk-Reward Ratio: ~1:5 (highly favorable for short trades)
⚠️ Bullish Invalidations – When to Avoid the Trade?
If Silver reclaims $34.57 and holds above, the pattern fails.
A false breakout scenario could occur if price breaks below $30 but quickly moves back above.
Watching for bullish divergence on indicators like RSI before entering a short position is recommended.
Final Conclusion: Bearish Bias with Strong Downside Potential
📉 Summary of the Bearish Case:
✔️ Double Top pattern confirms a bearish reversal if the neckline breaks.
✔️ Break of ascending trendline signals increasing seller control.
✔️ Key levels: Stop-loss above $34.57 | Entry below $30 | Target $23.01.
✔️ Additional confluence: RSI, MACD, and volume confirmation strengthen the trade setup.
🚀 If price action aligns with this analysis, this setup presents a high-probability short opportunity.
Would you like any refinements or additional insights? 🔥
XAU/USD Analysis – Wedge Breakdown & Bearish Trade Setup1. Chart Overview
The 15-minute XAU/USD chart shows a descending wedge pattern forming after a price rally. The wedge is characterized by a series of lower highs and lower lows, signaling a gradual weakening of bullish momentum. After consolidating within this wedge, the price has broken down, suggesting a bearish continuation.
This setup provides a high-probability short trade with clear entry, stop-loss, and multiple take-profit levels.
2. Key Technical Elements
A) Chart Pattern – Descending Wedge Breakdown
A descending wedge is typically a bullish reversal pattern when forming at the bottom of a downtrend. However, in this case, it appears at the end of a corrective move, making it a bearish continuation setup.
The upper trendline (black dashed line) acts as resistance, preventing price from breaking higher.
The lower trendline (solid blue line) represents temporary support.
The wedge narrows as price action contracts, leading to an eventual breakdown.
👉 Breakout Confirmation:
The price has broken below the wedge’s support trendline.
A minor pullback to retest the broken trendline suggests validation of the breakdown.
B) Resistance & Support Levels
1️⃣ Resistance Level (Sell Zone) – $3,100 to $3,135
This area previously acted as a supply zone, rejecting bullish attempts.
Price was unable to sustain above this level, leading to further downside pressure.
Stop-loss should be placed above this level ($3,135.57) to protect against invalidation.
2️⃣ Support Level (Buy Zone) – $3,050 to $3,056
This was a previous reaction zone where price briefly bounced before continuing lower.
Now acting as Take Profit 1 (TP1) at $3,056.58.
3️⃣ Breakout & Retest
After breaking the wedge, price retested the trendline but failed to reclaim it, confirming the bearish trend.
3. Trade Setup & Execution
🔵 Entry Point:
Short trade activation upon the breakdown and retest of the wedge structure.
Price rejection at the trendline confirms seller strength.
🔴 Stop-Loss:
Placed at $3,135.57, slightly above recent swing highs.
This protects against false breakouts or sudden reversals.
🎯 Take Profit Levels:
TP1 ($3,056.58): First target where buyers might step in.
TP2 ($3,022.39): Midway target, acting as another strong support.
TP3 ($2,985.44): Final target where price may stabilize or reverse.
4. Market Context & Confirmation Indicators
📉 Bearish Confirmation:
Strong downward momentum suggests continued selling pressure.
Price action is failing to make new highs, confirming lower highs and lower lows.
📊 Risk-to-Reward Ratio (RRR):
The trade offers a favorable RRR, as the downside potential is significantly larger than the stop-loss range.
⚡ Additional Confirmation:
A strong bearish candle confirmed the breakout, rejecting higher levels.
Potential support breakouts suggest that price could reach TP3 if bearish momentum continues.
5. Conclusion – Trading Strategy Summary
✅ Pattern Identified: Descending Wedge Breakdown (Bearish)
✅ Trade Direction: Short (Sell)
✅ Entry Trigger: Breakout & Retest of the Trendline
✅ Stop-Loss: Above $3,135.57 (Wedge Resistance Zone)
✅ Take Profit Targets:
TP1: $3,056.58
TP2: $3,022.39
TP3: $2,985.44
📌 Final Thoughts:
This setup provides a high-probability trade with a clear breakdown structure and downside potential. If the price continues to respect the bearish trend, reaching all TP levels is likely. However, traders should monitor for reversal signals and manage risk accordingly.
🔔 Risk Warning: Always use proper risk management and adjust positions according to market conditions! 🚀
04.04.25 Morning ForecastPairs on Watch -
FX:GBPUSD
FX:USDJPY
FX:NZDUSD
A short overview of the instruments I am looking at for today, multi-timeframe analysis down to what I will be looking at for an entry. Enjoy!
