The euro/US dollar currency pair is likely to end its downward movement and grow in the medium term:
- H1 – formation of an entry bullish wave
- H1 – break through the upper limit of the downward line
- D1 – the price retreated from the left shoulder level of the Inverse head and shoulders pattern
- D1 – formation of the reverse candlestick pattern Bull Hammer.
The formation data as well as relevant levels of support/resistance are shown on the charts below.
Let's start with a daily timeframe where the Inverse head and shoulders pattern is formed.
In case of successful completion of this model, the pair will reach the target level of 1.1275. However, to achieve it, the price needs to pass through the "neck" level and the sales zone of 1.0825-1.0850. If you buy a pair at the current price, then by the time these “bulwarks” are reached, our transaction will bring a good profit and can be closed without loss. The stop loss level is located at yesterday's low of 1.0500.
Transaction details (D1):
- buy – according to the current market situation
- take profit_1 – 1.0800
- take profit_2 – 1.1275
- stop loss – 1.0500.
As always, I offer you an alternative which allows you to enter the market with lower risks and at a better price. To find such setup, we should switch to a one-hour timeframe:
On the chart you can clearly see the entry bullish wave, a breakdown of the upper line of the descending channel, and also the level of 1.0560 which bulls will try to hold in case of a retest from the top to the bottom.
Transaction details (H1):
Buy limit – 1.0560 or buy when the price falls from the upper line of the descending channel
- take profit_1 — 1.0705
- take profit_2 — 1.0825
- take profit_3 — 1.1275
- stop loss — 1.0500.
Forecasting a further movement of the pair, I used the following articles:
- Reversal pattern Head and shoulders
- How to determine tp&sl levels for basic patterns of technical analysis
- Formation of channels and their peculiarities
- Reversal candlestick patterns.
I wish you profitable trade!
