The EUR/USD currency pair is showing signs of a potential downtrend in the near future, driven by technical analysis and key price levels on the charts.
1. Testing Demand (H1): On the H1 (1-hour) chart, there is a significant demand area that has proven to be a crucial support level in recent trading sessions. This demand zone has been tested multiple times, highlighting its importance.
2. Retesting Supply Area: Simultaneously, the 15-minute chart reveals a notable supply area that has acted as a formidable resistance zone. The price has struggled to breach this level, indicating strong selling pressure.
3. Bearish Bias: Given the confluence of these technical factors, traders may develop a bearish bias in the short term. The idea is that the EUR/USD pair is likely to touch the well-established demand zone on the H1 chart before making a potential reversal and retesting the supply area on the 15-minute chart.
4. Entry Strategy: Traders who subscribe to this view may look for a suitable entry point as the price approaches the demand area on the H1 chart. This entry could be supported by bearish candlestick patterns, such as shooting stars or bearish engulfing patterns, which may signal a reversal.
5. Risk Management: Effective risk management is essential in trading. To protect against potential losses, a stop-loss order should be placed just below the demand area on the H1 chart. This ensures that if the trade doesn't go as expected, losses are limited.
6. Profit Target: The initial profit target could be set at the retest of the supply area on the 15-minute chart. However, traders should consider implementing trailing stop orders or multiple profit targets to capitalize on the potential downward movement if it continues.
1. Testing Demand (H1): On the H1 (1-hour) chart, there is a significant demand area that has proven to be a crucial support level in recent trading sessions. This demand zone has been tested multiple times, highlighting its importance.
2. Retesting Supply Area: Simultaneously, the 15-minute chart reveals a notable supply area that has acted as a formidable resistance zone. The price has struggled to breach this level, indicating strong selling pressure.
3. Bearish Bias: Given the confluence of these technical factors, traders may develop a bearish bias in the short term. The idea is that the EUR/USD pair is likely to touch the well-established demand zone on the H1 chart before making a potential reversal and retesting the supply area on the 15-minute chart.
4. Entry Strategy: Traders who subscribe to this view may look for a suitable entry point as the price approaches the demand area on the H1 chart. This entry could be supported by bearish candlestick patterns, such as shooting stars or bearish engulfing patterns, which may signal a reversal.
5. Risk Management: Effective risk management is essential in trading. To protect against potential losses, a stop-loss order should be placed just below the demand area on the H1 chart. This ensures that if the trade doesn't go as expected, losses are limited.
6. Profit Target: The initial profit target could be set at the retest of the supply area on the 15-minute chart. However, traders should consider implementing trailing stop orders or multiple profit targets to capitalize on the potential downward movement if it continues.