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XAUUSD M30 BEST BUY AND SELL SETUP FOR TODAYThis 30-minute chart of Gold Spot (XAU/USD) reveals a critical decision zone ahead 📊. Price is currently reacting to a support area around 3210, marked by the purple zone. A Change of Character (ChoCH) has just occurred, suggesting a potential bullish reversal if price holds above this support 📈. There are two likely scenarios: 1️⃣ A bullish continuation where price forms higher lows and targets the supply zone near 3230 and potentially the strong high at 3252, or 2️⃣ A bearish break below support, triggering a drop towards the demand zone at 3170 and possibly further into the order block (OB) near 3160 📉. Traders should watch for confirmations like strong bullish candles or rejections at key levels before committing to a direction ✅. This is a high-probability setup with defined risk and reward zones! 💰📉📈
OANDA:XAUUSD
by GoldenTradeInsights
USD/ JPY) bullish trend analysis Read The ChaptianSMC trading point update Technical analysis of 4-hour for USD/JPY (U.S. Dollar vs Japanese Yen). Here's the breakdown of the idea --- 1. Bullish Structure The market is moving within a rising channel, indicating a bullish trend. Higher highs and higher lows support the uptrend. --- 2. Key Zones Support Zone (Demand Area): Around the 144.500–145.000 level, price has reacted positively here multiple times — it's marked as a strong support level. Resistance Zone: Around 148.000 — this level is marked as an obstacle before reaching the final target point. --- 3. Indicators & Confluence EMA 200: Price is currently testing just above/below the EMA 200 — a key dynamic support/resistance level. RSI: Showing a bullish divergence or a potential recovery from oversold zone (both RSI lines are turning upward). MACD-style Oscillator (Custom): Showing signs of a bullish crossover, confirming upward momentum. --- 4. Projection & Target The expected move is a bounce from support, followed by: A retest of resistance around 148. A continuation to the target zone at 150.864 — marked as the final target point. The potential move is approximately +592 pips (4.19%). Mr SMC Trading point --- Conclusion This is a bullish continuation setup, expecting price to maintain above the support zone and ride the trendline and channel toward 150.864. The confluence of RSI, structure, and EMA adds strength to the idea. Pales support boost 🚀 analysis follow)
Long
by SMC-Trading-Point
18
EUR/USD) breakout trand line analysis Read The ChaptianSMC trading point update Technical analysis 1-hour EUR/USD (Euro vs US Dollar) chart using Smart Money Concepts (SMC) and technical confluence. Here's the idea behind the analysis: --- 1. Bearish Rejection Setup Strong resistance zone around 1.12176–1.12500 has been tested multiple times and held. Bearish rejection is shown with a black circle indicating a breakdown from previous support turned resistance (support flip). Price failed to stay above the key structure, indicating bearish intent. --- 2. Break of Structure The support level near 1.11600 has been broken, marked by the black circle. This is a clear change in structure, implying a likely shift from bullish to bearish. --- 3. Price Action Forecast The chart expects a minor pullback (retest) into the broken support zone (now resistance). Followed by a continuation move to the downside, targeting the support level at 1.10668. Projection shows a ~100 pip drop from current levels. --- 4. EMA & RSI EMA 200 is trending downward and acting as dynamic resistance. RSI (14) is under 50 and sloping down, suggesting bearish momentum is building. Mr SMC Trading point --- Conclusion This is a bearish continuation setup based on structure break, failed bullish momentum, and confirmation via indicators. The analyst expects EUR/USD to reject the 1.116 area again and drop toward the 1.10668 target. Pelas support boost 🚀 analysis follow)
Short
by SMC-Trading-Point
5
GBP/JPY) bullish trend analysis Read The ChaptianSMC trading point update Technical analysis setup for the GBP/JPY pair on a 4-hour timeframe. Here's the breakdown of the trading idea: --- Key Concepts Highlighted: 1. Support Trend Level (Yellow Zone): The yellow zone marks a strong confluence area: Horizontal support from previous price reactions. Trendline support that has held multiple times. Close to the 200 EMA (at 191.833), which acts as dynamic support. 2. Bullish Reversal Pattern: The chart shows a rounded bottom/cup-like structure forming at support—often a sign of accumulation before a reversal. Price is expected to bounce from this support zone and move higher within the ascending channel. 3. Target Point Projection: The projected move is around 515.8 pips, targeting the 197.949 level. This target aligns with the upper boundary of the ascending trend channel. 4. RSI (Relative Strength Index): RSI is around 43–44, near oversold territory, suggesting potential bullish momentum if a bounce occurs. Mr SMC Trading point Conclusion: This setup suggests a potential long (buy) opportunity: Entry near the 193.0–193.5 zone (support/trendline confluence). Stop loss likely below the 200 EMA (~191.5 area). Target arounSMC trading point update Technical analysis setup for the GBP/JPY pair on a 4-hour timeframe. Here's the breakdown of the trading idea: --- Key Concepts Highlighted: 1. Support Trend Level (Yellow Zone): The yellow zone marks a strong confluence area: Horizontal support from previous price reactions. Trendline support that has held multiple times. Close to the 200 EMA (at 191.833), which acts as dynamic support. 2. Bullish Reversal Pattern: The chart shows a rounded bottom/cup-like structure forming at support—often a sign of accumulation before a reversal. Price is expected to bounce from this support zone and move higher within the ascending channel. 3. Target Point Projection: The projected move is around 515.8 pips, targeting the 197.949 level. This target aligns with the upper boundary of the ascending trend channel. 4. RSI (Relative Strength Index): RSI is around 43–44, near oversold territory, suggesting potential bullish momentum if a bounce occurs. Mr SMC Trading point Conclusion: This setup suggests a potential long (buy) opportunity: Entry near the 193.0–193.5 zone (support/trendline confluence). Stop loss likely below the 200 EMA (~191.5 area). Target around 197.95, offering a good risk/reward ratio. The idea is based on trend continuation, a bounce from confluence support, and RSI support for bullish reversal. Pales support boost 🚀 analysis follow )
by SMC-Trading-Point
20
XAUUSD M30 BEST BUY AND SELL SETUP FOR TODAYGold (XAUUSD) is trading near a 🔴 strong resistance zone (3,239–3,252). If price shows a bearish rejection from this area, it could be a sign of a 🧨 liquidity grab or fake breakout. This sets up a potential 📉 sell opportunity, targeting the support zones at 3,175 and possibly down to 3,120 where the 🧊 weak low and demand lie. A safe 🛑 stop-loss can be placed above 3,260 to manage risk. However, if the price gives a strong breakout and 📈 retest above 3,252, then a bullish continuation toward 3,325–3,350 is likely 🎯. Patience is key—wait for clear confirmation before entering the trade ⚖️📊.
OANDA:XAUUSD
by GoldenTradeInsights
1
USD/JPY) support level back up Read The ChaptianSMC Trading point update Technical analysis of USD/JPY on the 4-hour timeframe suggests a bullish setup with the following key insights: Analysis Overview: 1. Current Price: 147.492 2. Support Zone: Around 145.263 to 146.000 Marked as "Support Level / FVG" (Fair Value Gap), this is the potential demand zone where the price may retrace before bouncing. 3. Trendline: An ascending trendline is supporting the bullish structure. 4. EMA 200: Price is trading above the 200 EMA (145.263), which is generally a bullish signal. 5. RSI Indicator: RSI is near overbought levels (currently at 63.46 and 70.56), suggesting strong bullish momentum but a potential pullback. 6. Target Zone: 151.360 Highlighted as the "Target Point" – this is the resistance area where price might face selling pressure. Mr SMC Trading point Trade Idea: Entry: Buy on retracement into the support zone (around 145.5–146.0). Stop Loss: Below the support zone or EMA (around 144.800 or as per risk tolerance). Take Profit: Near the target zone around 151.360. Risk-to-Reward: Favorable, approximately 1:2.5 to 1:3 depending on the entry. Conclusion: The idea is based on price respecting support, fair value gap (FVG), bullish structure, and a target based on recent price projections. If the price respects the support and bullish trendline, the bullish continuation towards 151.360 is a valid expectation. Pales support boost 🚀 analysis follow)
Long
by SMC-Trading-Point
14
XAU/USD) back up Trand analysis Read The ChaptianSMC Trading point update Technical analysis for XAU/USD (Gold vs. US Dollar) on the 4-hour timeframe suggests a bullish reversal setup from a key support zone. Here's a breakdown of the idea: Key Observations: 1. Support Zone (Yellow Box at ~3,100–3,140): The price recently touched a significant support area marked by multiple previous bounces (green arrows). The latest green arrow shows a bullish reaction from this zone, indicating potential for an upward move. 2. Resistance Zone (~3,220–3,250): This intermediate zone is expected to be the first area of interest for bulls. The analysis suggests a brief pullback or consolidation before continuation. 3. Target Point (~3,375): The chart outlines a projected move to around 3,375, aligning with a previous supply zone and the upper channel line. This is likely the main target for a swing trade. 4. EMA 200 (Blue Line - ~3,221): Price is hovering around the 200 EMA, acting as a dynamic resistance. A breakout above this would add bullish confirmation. 5. RSI Indicator (~41): RSI is recovering from an oversold region (~38), indicating potential momentum building for a reversal. Mr SMC Trading point --- Conclusion: This is a bullish reversal setup with: Entry zone: Around 3,120–3,140 Short-term resistance: ~3,220–3,250 Final target: ~3,375 Invalidation: A clear break and close below the yellow support box (~3,100) Pales support boost 🚀 analysis follow)
FX:XAUUSDLong
by SMC-Trading-Point
23
XAU/USD) bullish trend analysis Read The ChaptianSMC trading point update Technical analysis of XAU/USD (Gold Spot price against USD) on a 1-hour timeframe, featuring a Smart Money Concept (SMC) approach. Here's a breakdown of the key ideas presented: --- 1. Downtrend & Trendline Break The chart initially shows a downtrend with two red arrows marking lower highs. A trendline is broken, indicating a potential shift in market structure. CHOCH (Change of Character) is labeled — a key SMC concept signaling a reversal from bearish to bullish structure. --- 2. Orderblock & FVG (Fair Value Gap) A bullish orderblock is highlighted, indicating an area where institutional buying may have occurred. A Fair Value Gap (FVG) is shown, which often acts as a magnet for price to fill inefficiencies before continuing in the intended direction. --- 3. Resistance & Target Zones A resistance level is marked near 3248–3250, which price may revisit and possibly break. Two target points are identified: First target: ~3344 Final target: ~3433 --- 4. EMA 200 The EMA 200 is acting as dynamic resistance; a break above it adds confluence to the bullish bias. --- 5. Expected Move The analysis anticipates: 1. A pullback into the FVG or orderblock. 2. A bullish continuation after mitigating those zones. 3. Price aiming for the resistance and eventually the upper targets. Mr SMC Trading point --- Conclusion This is a bullish outlook based on a structural break (CHOCH), institutional demand (orderblock), and gap-filling logic (FVG). The price is expected to pull back slightly and then rally toward the 3344 and 3433 levels if it holds the orderblock zone. Pales support boost 🚀 analysis follow)
OANDA:XAUUSDLong
by SMC-Trading-Point
5
XAU/USD) bearish trand analysis Read The ChaptianSMC Trading point update Technical analysis of XAU/USD (Gold vs. USD) on the 4-hour timeframe suggests a bearish outlook. Here's a breakdown of the key elements: --- Key Levels: 1. Resistance Zone (Upper Yellow Block): Around 3,450–3,500. Price was previously rejected from this level, forming a double-top like structure. 2. Rejection Point (Mid-Level Zone): Near 3,300–3,310. Price repeatedly failed to break and hold above this zone, indicating strong selling pressure. 3. Support Zone / Demand Block (Lower Yellow Block): Around 3,100–3,125. This is the target area, labeled clearly as TARGET POINT: 3,116.501. --- Indicators: 200 EMA: Currently above the price, suggesting downward momentum. Acting as a dynamic resistance. RSI (14): Around 39, slightly above oversold territory (30). Indicates bearish pressure but not yet oversold — room for further downside. The chart suggests that if price breaks below the mid-level support, we could expect a move towards the support block around 3,116. The bearish wave projection drawn in the chart confirms the trader’s expectation of a drop. The setup appears to be a break-and-retest of the mid-zone, followed by continuation downward. Mr SMC Trading point --- Trading Idea Summary: Bias: Bearish Entry Trigger: Break below ~3,225–3,230 with confirmation Target: ~3,116 Invalidation/Stop: Close above 3,300–3,310 (rejection zone) Pales support boost 🚀 analysis follow)
OANDA:XAUUSDShort
by SMC-Trading-Point
10
AUD)USD) resistance level back down Read The ChaptianSMC Trading point update Technical analysis for the AUD/USD pair on the 1-hour timeframe. Here's a breakdown of the idea presented: Key Elements: 1. Resistance Level (0.65000 - 0.65200 area): Price is approaching this strong resistance zone. RSI is in the overbought zone (above 70), indicating potential reversal or correction. 2. Expected Price Action: The chart suggests that price may spike into the resistance area (possibly a liquidity grab). After hitting resistance, a drop is expected toward the FVG (Fair Value Gap) zone. 3. FVG and Target Zone (~0.64059): There’s a highlighted Fair Value Gap that may attract price for mitigation. Target point is near the EMA200 level and inside a previous structure zone. This area also aligns with the RSI cooling off. 4. Support Level (~0.63600): Marked as a stronger support area, though the current trade setup doesn't expect price to reach there soon. 5. EMA200 (blue line around 0.64202): Acts as dynamic support. Target is slightly below this EMA, potentially a liquidity sweep before a bounce. Mr SMC Trading point --- Summary of the Idea: Bearish bias after a resistance rejection. Look for short opportunities around the resistance zone (0.6500 area). Target near 0.6405–0.6420 (FVG + EMA200). Overbought RSI supports this pullback expectation. Pelas support boost 🚀 analysis follow)
Short
by SMC-Trading-Point
8
GOLD XAU-USD CORRECTION COMPLETE REALLY TOWARD UP $3400 0PEN XAUUSD continues to trade within a clearly defined bullish channel, showing strong adherence to upward trendlines and key support levels. Recent price action confirms the ongoing strength of bullish momentum, with higher highs and higher lows reinforcing the prevailing trend. Technical indicators, including moving averages and RSI, remain aligned with buyers, while macroeconomic factors such as inflation concerns and global risk sentiment further support the upside narrative. As the precious metal steadily advances, the $3400 level emerges as a key psychological and technical target, suggesting that, barring significant shifts in market dynamics, gold may continue its trajectory towards new highs in the medium term."
OANDA:XAUUSDLong
by SadarExplore
XAU/USD) Bullish trand line analysis Read The ChaptianSMC Trading point update Technical analysis of Gold Spot (XAUUSD) on the 4-hour timeframe, featuring key support and resistance levels, price action projections, and RSI for momentum evaluation. Here's a breakdown of the idea: Key Points in the Analysis: 1. Support & Resistance Zones: Big Support / Buying Zone: Around 3,222 – 3,240. This zone has seen previous bullish reversals and is supported by the 200 EMA. Intermediate Support Level: Around 3,270–3,290, where price might bounce before attempting a breakout. Key Resistance Level: Around 3,350–3,365. Price must break this area to move toward higher targets. 2. Price Action Projections: The analysis shows two bullish potential scenarios: Scenario 1: Price breaks above the resistance level directly and moves toward the target point at 3,535.83. Scenario 2: A retracement to the lower support or even the big buying zone before a bullish rally to the same target. 3. RSI (Relative Strength Index): Currently near the neutral zone (around 49), suggesting there's room for movement in either direction. No extreme overbought/oversold signals right now. 4. EMA (200): The price is currently hovering above the 200 EMA (3,222.01), which acts as a long-term support and trend indicator. Mr SMC Trading point Summary of the Trading Idea: Bias: Bullish Entry Zones: Look for long entries at either the support level (3,270–3,290) or lower buying zone (around 3,222). Target: 3,435.05 initially, then 3,535.83. Invalidation: A clear breakdown below the 3,222 support level could invalidate the bullish bias. Pelas support boost 🚀 analysis follow)
FX:XAUUSDLong
by SMC-Trading-Point
USD/JPY) Bullish reversal analysis Read The ChaptianSMC Trading point update Technical Analysis USD/JPY suggests a bullish outlook based on the following key technical components: 1. Buying Zone: The chart identifies a green rectangular area labeled "BUYING ZONE" just above the 200 EMA (blue line at 144.079). This implies that price retracement into this zone could be an opportunity to go long (buy). 2. Support & Resistance: Support Level: Clearly marked around 143.00, showing a previous demand area. Resistance Level: Around the 145.800–146.000 region, price previously rejected here. 3. Bullish Pattern: The curved arrow suggests the formation of a bullish continuation pattern (possibly a cup & handle or flag), with the expectation of a breakout toward the upside. 4. Target Point: The target is projected at 148.153, implying a potential move of approximately 291.7 pips from the buying zone—suggesting a favorable risk-reward ratio. 5. RSI Indicator: The RSI (Relative Strength Index) is currently around 55, not in the overbought zone, indicating more room for upside movement. Mr SMC Trading point Summary of Idea: Strategy: Buy near 145.00–145.20 (Buying Zone). Stop Loss: Just below the 200 EMA or the lower bound of the green zone. Take Profit: Near the 148.153 target. Confirmation: Wait for bullish confirmation/candlestick reversal in the buying zone. Pelas support boost 🚀 analysis follow)
Long
by SMC-Trading-Point
8
BTC/USD) Resistance level pullback Read The ChaptianSMC Trading point update Technical analysis of Bitcoin (BTCUSDT), highlighting key levels and potential price movements based on trend channels, support/resistance, and RSI. Here's the breakdown: --- Key Elements in the Analysis: 1. Trend Channel: BTC is trading within an ascending channel, indicating an ongoing bullish trend. The recent price action hit the upper boundary (resistance) of the channel, suggesting potential for a pullback. 2. Resistance Zone: 105,586.06 is marked as a resistance level, where price faced rejection. Strong reaction here suggests sellers are defending this area. 3. Support Zone: A new support level is established around 98,000. This zone aligns with the lower boundary of the ascending channel and previous breakout structure. 4. Target Point (Bearish Projection): The chart projects a potential drop to the 97,367.51 level, representing a ~7.4% correction. This move mirrors the prior leg up, applying a measured move concept. 5. RSI Indicator: RSI is around 66–71, indicating overbought conditions. A bearish divergence or trendline break on RSI suggests weakening momentum. Mr SMC Trading point --- Summary of Trading Idea: Bias: Short-term Bearish (correction within an overall bullish trend) Expected Move: Potential dip toward 97,367.51 support Confirmation: Rejection at resistance, RSI divergence, and trendline break Invalidation: A strong breakout above 105,586.06 would nullify the correction setup and favor continued bullish movement pelas support boost 🚀 analysis follow)
Short
by SMC-Trading-Point
7
XUA/USD) bullish trend analysis Read The ChaptianSMC Trading point update Technical analysis chart for Gold Spot (XAUUSD) on the 4-hour timeframe. Here's a breakdown of the key ideas behind the analysis: 1. Trend and Structure: The overall trend shows a bullish move followed by a correction and now a potential continuation upward. A bullish breakout from a descending trendline suggests a shift in momentum from bearish to bullish. 2. Key Zones: Order Block / Buying Zone (~3,280-3,310): A demand area where price is expected to find support and potentially bounce higher. Support Level (~3,320-3,360): Price is currently above this level, suggesting buyers are in control. Resistance Level (~3,440-3,495): Marked as a potential short-term ceiling; a breakout above this level may signal strong bullish continuation. Target Point (~3,494): This is the projected take-profit level for a bullish move. 3. RSI Indicator: RSI is around 63–64, close to overbought territory but not yet extreme. This suggests moderate bullish momentum without signs of immediate reversal. 4. Projected Move: The chart outlines a possible retracement to the support or order block zone, followed by a bounce and a push toward the resistance level and target. Mr SMC Trading point Strategy Implication: Buy on pullback to the support or order block zone. Stop-loss could be placed below the order block (~3,280). Take-profit around the target zone (~3,494). pales support boost 🚀 analysis follow)
OANDA:XAUUSDLong
by SMC-Trading-Point
25
EUR/USD) Big Support level Analysis Read The ChaptianSMC Trading point update Technical analysis of EUR/USD on the 1-hour timeframe. The idea centers around a potential reversal from a major support zone, aiming for higher resistance targets. Here's a detailed breakdown: --- 1. Big Support Level A strong horizontal support zone is highlighted around 1.1275–1.1290. Price is currently reacting off this level, suggesting a potential bullish reversal. 2. EMA 200 as Resistance The 200-period EMA (~1.1346) is above current price, possibly acting as a dynamic resistance. A break and hold above it could confirm bullish momentum. 3. Resistance Levels & Target Points The first target is the 1.14367 resistance level, a clear supply zone. The second target point is around 1.15622, aligned with a previous major high and strong resistance zone. 4. RSI Indicator RSI is at 44.02, indicating neutral to slightly oversold conditions—this supports a potential bullish move, especially from support. 5. Forecast Path The chart projects a likely pullback and breakout pattern: Rebound from the support zone. Break through EMA 200 and minor resistance. Rally toward first and second targets. Mr SMC Trading point --- Summary of the Idea: This is a trend-reversal-to-continuation setup, with EUR/USD expected to rise from a key support area toward 1.14367, and potentially 1.15622, provided price holds above the support and breaks the EMA 200. Pales support boost 🚀 analysis follow)
Long
by SMC-Trading-Point
20
USD/JPY) Bullish trand analysis Read The ChaptianSMC Trading point update Technical analysis of USD/JPY on the 2-hour timeframe, and it presents a bullish continuation setup. Here's a breakdown of the key elements and the idea behind the analysis: --- 1. Ascending Channel Formation The price is trading within an ascending channel, suggesting a controlled uptrend. Higher highs and higher lows confirm the trend structure. 2. Key Support and Fair Value Gap (FVG) There’s a well-identified support level where price has bounced before (highlighted in yellow). A Fair Value Gap (FVG) zone is marked slightly above the support level, which could act as a short-term demand area. Price is currently pulling back into this zone, potentially setting up a buying opportunity. 3. EMA 200 Support The 200 EMA (~143.78) is acting as dynamic support just below the current price. If price drops further, this level may offer strong technical support. 4. RSI Momentum RSI is above 50 (currently 56.37), supporting the bullish trend and showing room for continued upside. 5. Target Point The chart anticipates a bounce off the support/FVG zone and a rally toward the upper boundary of the channel, targeting 147.153. Mr SMC Trading point --- Summary of the Idea: This is a bullish continuation setup within an uptrend channel. The analyst expects a potential long entry around the FVG/support zone, with a target at the channel top (147.15). Confluence from the EMA 200, RSI, and previous structure supports this bullish bias. Pales support boost 🚀 analysis follow)
Long
by SMC-Trading-Point
15
XAU/USD) Bullish reversal analysis Read The ChaptianSMC Trading point update technical analysis of Gold Spot (XAU/USD) on the 4-hour timeframe, projecting a bullish outlook. Here's a breakdown of the main ideas conveyed: 1. Support Level & Double Bottom A strong support level is marked around the 3,177 area, with the price bouncing from it twice (highlighted by two black dots), indicating a potential double bottom pattern, which is typically a bullish reversal signal. 2. EMA 200 Support The 200 EMA (Exponential Moving Average) lies just below the current price (~3,177), acting as dynamic support. The fact that price is holding above it adds strength to the bullish argument. 3. Bullish Divergence on RSI The RSI (Relative Strength Index) shows a bullish divergence, where the price made lower lows but RSI made higher lows—another potential reversal indicator. 4. Price Projection If the bullish move plays out, the chart outlines two upward targets: Target Point: ~3,501.67 Next Target Point: ~3,729.23 These are based on measured moves from previous impulse legs (shown by vertical blue projections). 5. Entry Setup The chart suggests a break above the short-term consolidation could trigger the bullish run toward the first target, aligning with bullish price structure and support confirmation. Mr SMC Trading point --- Overall Idea: The chart expects a bullish reversal from support, confirmed by double bottom, EMA 200 support, and RSI divergence, targeting higher resistance zones. Pales support boost 🚀 analysis follow)
FX:XAUUSDLong
by SMC-Trading-Point
25
Understanding the Inverted Cup and Handle Chart PatternUnderstanding the Inverted Cup and Handle Chart Pattern Understanding chart patterns is fundamental for market participants. This article delves into the inverted cup and handle formation, a bearish signal indicating a potential downward movement. Explore its identification, trading strategies, psychological underpinnings, common pitfalls, and more to boost your trading knowledge. What Is the Inverted Cup and Handle Pattern? The inverted cup and handle, sometimes called an upside-down cup and handle pattern, is a bearish chart pattern that may appear during up- and downtrends. It is the opposite of the traditional cup and handle pattern, which is bullish. The inverse formation consists of two main parts: the "cup," which is an inverted U-shape, and the "handle," a small upward retracement following the cup. Identifying the Inverted Cup and Handle Pattern Identifying the inverse cup and handle pattern involves recognising a specific sequence of market movements that signal a potential bearish move. Here's a step-by-step overview of identifying this formation: Cup Formation - Shape: The pattern begins with an inverted U-shaped "cup." The price gradually rises, consolidates, and then begins to decline, reflecting a shift from bullish to bearish sentiment. - Depth: The cup should have a rounded top, not a sharp V-shape, indicating a gradual reversal. The depth of the cup can vary but typically represents a significant portion of the preceding movement. Handle Formation - Upward Retracement: After the cup's formation, prices usually experience a minor upward retracement or consolidation, forming the "handle." This movement should be relatively short and not exceed the initial high of the cup​. - Shape and Duration: The handle often appears as a small flag or pennant and should be brief in duration compared to the cup. An optimal handle retraces no more than half of the cup’s depth​. Breakout Confirmation - Neckline Break: The pattern is confirmed when prices break below the neckline, the lowest point of the handle. This breakout often leads to a significant decline in prices, signalling a bearish trend​. - Volume Surge: Volume typically decreases during the formation of the cup and increases as prices decline, especially during the handle formation. A substantial increase in volume during the breakout can validate the pattern and minimise the risk of false signals​. The Psychology of the Inverted Cup and Handle The psychology behind the inverse cup and handle pattern is rooted in market sentiment and behavioural finance. This bearish pattern reflects a shift from optimism to pessimism among traders. - Initial Uptrend: The formation starts with an upward movement, where traders are generally bullish, driving prices higher. This phase is marked by growing confidence and increasing demand. - Formation of the Cup: As prices peak, consolidate, and start to decline, some traders begin to take profits, leading to reduced buying pressure. The rounded decline of the cup signifies a gradual shift in sentiment from bullish to bearish as traders become cautious and selling pressure mounts. - Handle Formation: The minor upward retracement forming the handle indicates a brief period of consolidation where the market tests the resolve of buyers. It can be considered a dead cat bounce. This phase often traps optimistic traders who expect the uptrend to resume, but the overall sentiment remains fragile and cautious​. - Breakout and Decline: The decisive break below the neckline represents a culmination of bearish sentiment. At this point, selling pressure overwhelms any remaining bullishness, leading to a sharp decline. The volume surge during this breakout confirms the shift in market psychology from hopeful to bearish as traders rush to exit their positions or initiate short sales​. Trading the Inverted Cup and Handle Pattern Trading the inverted cup and handle pattern involves careful identification and strategic decision-making to maximise potential returns. This pattern presents two primary entry points for traders: during the handle formation or after the neckline break. Entry on the Break of the Handle - Risk-Reward Advantage: Entering on the breakout of the handle’s lower boundary offers a better risk-to-reward ratio but requires more skill and confidence in pattern recognition. - Technical Tools: Traders often use a medium-term moving average (like 21 periods) to confirm the downward leg of the handle. A decisive close below the moving average indicates a continuation of the downward handle leg. - Momentum Indicators: Using momentum indicators like the RSI (Relative Strength Index) or stochastic oscillator helps confirm downward movement. Bearish divergence suggests that the bearish trend is likely to continue. - Volume Analysis: Increasing volume during the handle's breakout indicates strengthening seller control. High volume often validates the pattern and potentially reduces the risk of false signals​. Note that volume data may be less reliable in a decentralised forex market. - Stop Loss and Profit Target: Traders typically place a stop loss above the handle's high to potentially protect against upward spikes. The reverse cup and handle pattern target is usually set at a distance equal to the cup's height, projected downward from the handle's breakout point, although it can be greater if the retracement is particularly shallow. Entry After the Neckline Break - Confirmation Advantage: Waiting for the neckline break offers greater confirmation of the formation but may provide a less favourable risk-to-reward ratio. - Price Action: A decisive close below the pattern's low, ideally with a strong candlestick and minimal wicks, indicates a reliable breakout. This typically confirms the bearish trend and provides a clear entry signal. - Volume Confirmation: Higher volume during the neckline break can further validate the pattern and indicate that the breakout is genuine and not a false signal​. - Stop Loss and Profit Target: In this scenario, the stop loss is typically set above the handle's high. The profit target remains the same, projecting the cup's height downward from the breakout point​. Common Mistakes to Avoid When trading the upside-down cup and handle pattern, avoiding common mistakes is key for maximising potential returns. Some of the more common mistakes traders make include: - Premature Entry: Entering a trade too early, before the handle completes or the neckline breaks, can lead to false signals and losses. Most traders wait for clear confirmation, such as a decisive close below the neckline with increased volume​. - Ignoring Volume: Volume is a critical component in confirming the pattern. Low volume during the breakout phase may indicate a fakeout. Traders typically look for a substantial increase in volume to validate the pattern​. - Incorrect Pattern Identification: Misidentifying the pattern is a common error. The cup should have a rounded bottom, not a sharp V-shape, and the handle should be relatively short. Accurate identification requires practice and attention to detail​. - Overlooking Market Conditions: External factors, such as news events or broader market trends, can impact the pattern’s reliability. Traders consider these conditions when planning their trades​. Advantages and Disadvantages As with all chart patterns, the inverted cup and handle pattern comes with its pros and cons. Here are some key advantages and disadvantages of using this pattern: Advantages - Clear Signal: The pattern provides a clear signal of a potential bearish movement, helping traders anticipate market declines​. - Risk Management: With defined entry and exit points (handle high for stop loss and cup depth for profit target), it aids in effective risk management. - Flexibility in Analysis: Several forms of analysis, from support/resistance and momentum indicators to volume and price action, can be used to trade the pattern. - Versatility: Applicable across various timeframes and markets, including stocks, forex, and commodities, making it a versatile tool for different trading strategies​. Disadvantages - Complex Identification: Accurately identifying the pattern can be challenging, requiring significant experience and skill​. - Rarity: The pattern doesn’t occur frequently, limiting trading opportunities. - False Breakouts: Like all chart patterns, it is susceptible to false breakouts, especially if not confirmed with volume and other technical indicators​. - Timing Sensitivity: Entering too early during the handle formation can result in premature positions, while waiting for the neckline break might reduce the risk-to-reward ratio​. The Bottom Line The inverted cup and handle pattern is one of the most popular chart patterns among traders of all levels. However, like any technical formation, it should be used alongside other indicators and sound risk management to potentially increase its effectiveness. By mastering patterns like the inverted cup and handle, traders can gain deeper insights into market psychology and price action to navigate volatile markets with greater confidence. FAQ What Is the Inverse Cup and Handle Pattern in Forex? The inverse cup and handle pattern in forex is a bearish chart pattern. It features an inverted U-shaped cup followed by a small upward retracement (the handle). This pattern suggests that sellers are gaining control, and prices are likely to decline further once the neckline is broken. How Can You Trade the Inverse Cup and Handle? Traders can enter positions either on the break of the handle’s lower boundary or after the neckline break. Entering during the handle might offer a better risk-to-reward ratio, while waiting for the neckline break provides greater confirmation. Key tools to validate the breakout include moving averages, momentum indicators like RSI or stochastic oscillator, and volume analysis. What Happens After the Reverse Cup and Handle Pattern? After the reverse cup and handle pattern is completed, the price typically moves downward strongly. This bearish movement is often confirmed by a strong breakout below the neckline with increased volume, signalling a sustained decline in prices.​ What Is the Opposite of the Cup and Handle? The opposite of a cup and handle is the inverse cup and handle pattern. While the cup and handle indicates a bullish movement, the inverse version signals a bearish trend. Is the Inverted Cup and Handle Bullish or Bearish? The inverted cup and handle pattern is bearish. It indicates that the price will move downwards, suggesting that traders may open short trades. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
1
USD/JPY) bullish trend analysis Read The ChaptianSMC Trading point update Technical analysis of USD/JPY chart shows a bullish reversal setup. Here’s a breakdown behind the analysis: 1. Downtrend & Channel Breakout: Price was trending downward within a descending channel (marked “channel trend”). Recently, the price broke out of the channel, signaling a potential trend reversal. 2. Demand Zone (Diamond Zone): The yellow box labeled “Diamond Zone” represents a demand/support zone where price previously found buyers. A retest of this zone is expected before the bullish move. 3. EMA (200): The EMA (200) is currently above the price but close. A break above this level (142.522) could add to bullish momentum. 4. RSI Indicator: RSI is showing a bounce off a mid-level (~50), suggesting bullish momentum is gaining. 5. Target Level: The analysis targets 147.838, which aligns with a prior resistance zone. The move projects a 5.19% gain (~778.5 pips) from the current setup. Trading Idea Summary: Entry: Around the “Diamond Zone” after a successful retest. Confirmation: Watch for bullish candlestick patterns or a break above EMA 200. Target: 147.838 Stop Loss (implied): Below the Diamond Zone (~140.000) Pales support boost 🚀 analysis follow)
Long
by SMC-Trading-Point
18
Chart structure reacts to memory. Momentum + reaction zones! BTCWhat you're seeing isn’t just price action—it's memory in motion. 🟥 Prior momentum shifts marked critical turning points where sellers temporarily dominated. 🟩 Support responses signaled reactive strength, giving early signs of accumulation. 📘 Consolidation zones show where price "remembered" to pause—these often act as launchpads or traps. 🟧 Swept demand cleared out weak hands before a sustained move. 📈 Historical resistance, once broken, becomes memory-based support. Each label isn't a signal—it's a story. This chart reminds us: 👉 Before price moves, it tests memory. 👉 Before breakouts, it absorbs emotion. 👉 And before trends, it reacts to old battles. 🧠 The more you study structure, the more you see intention—not randomness.
Long
by tradingqueen1980