FX.co ★ Royal_king | EUR/USD

Based on the provided data, we are analyzing a single 4‑hour (H4) candlestick for EURUSD with the following details: Open=1.17832, High=1.18346, Low=1.17832, Close=1.18299. This forms a strong bullish candle with a long lower wick (the open and low are identical) and a close near the high, indicating that sellers initially pushed the price down to the open level, but buyers aggressively stepped in and drove the price significantly higher throughout the session. The close aligns exactly with the listed key level of 1.18299, reinforcing its technical significance. The descending price ladder from 1.21095 down to 1.15645 confirms a prolonged broader downtrend over the January‑February period. Immediate resistance above is at 1.18915, and the next support below is at 1.17825. This candle suggests a potential reversal signal or at least a strong bounce within the larger bearish structure, as buyers demonstrated clear control. Buying (Long) Plan A long trade here is a counter‑trend speculation that the bullish momentum will continue and challenge higher resistance levels. The long entry trigger requires a confirmed break above the immediate resistance at 1.18915, validated by an H4 candle closing above this level. This would signal that the buying pressure seen in the candle has enough strength to overcome the next overhead barrier. A more aggressive entry could be considered on a break above the candle’s high at 1.18346, targeting a move to 1.18915. The stop‑loss must be placed below the candle’s low at 1.17832, ideally at 1.17750 to account for the next support at 1.17825. Initial profit targets are the next resistance levels: 1.19460, 1.20005, and 1.20550. Selling (Short) Plan The prevailing downtrend makes short setups the higher‑probability approach. The primary short entry trigger is a breakdown below the key support at 1.17825, confirmed by an H4 close below this level. A break below the candle’s low at 1.17832 would serve as early confirmation that the bullish rejection may be failing, but waiting for the more significant support level increases reliability. Alternatively, a short entry could be taken on a rejection from the 1.18915 resistance if a bearish reversal pattern forms (e.g., a bearish engulfing or pin bar). For a breakdown trade, the stop‑loss should be placed above the candle’s high at 1.18346, or more conservatively above 1.18915. The profit targets are the next support levels: 1.17280, 1.16735, and 1.16190. Confirmation and Risk Management The strong bullish candle at a key support introduces uncertainty within a dominant downtrend; therefore confirmation is essential. For longs, waiting for a decisive close above 1.18915 is crucial to avoid a false breakout. For shorts, a clean break below 1.17825 provides a strong signal. Use additional confirmation such as increasing volume on the breakout or bearish/bullish divergence on momentum oscillators (e.g., RSI, MACD). Risk per trade must be strictly limited to 1–2% of trading capital, with position sizing adjusted to the stop distance (approximately 50 pips for a short using 1.18346 stop, or 110 pips for a long using 1.17750 stop). Always place stop‑loss orders and never move them against the trade. Scenario Planning and Conclusion Prepare for three scenarios: 1) Bullish Reversal: A sustained break above 1.18915 opens a move toward 1.19460; consider adding on a retest of the breakout level. 2) Bearish Continuation: A break below 1.17825 (especially below 1.17280) confirms the downtrend’s resumption, targeting 1.16735 and lower; hold shorts with a trailing stop. 3) Range Consolidation: Price oscillates between 1.17825 and 1.18915; avoid trend‑following trades and use range‑bound strategies only with clear outer boundaries. In conclusion, the bias remains bearish overall, but the strong bullish candle at support warns of a potential bounce or reversal. The prudent approach is to wait for a confirmed breakout of the 1.17825–1.18915 range before initiating any trade. This single candle highlights a critical inflection point; its true significance will be revealed by subsequent price action. Disclaimer: This analysis is for educational purposes based on a single, limited data point. Trading forex involves substantial risk and is not suitable for all investors. This is not financial advice. Always conduct your own comprehensive analysis and consider consulting a qualified financial advisor before making any trading decisions.