EUR/GBP: Bullish Butterfly Pattern with Confluence
EUR/GBP is currently exhibiting a bullish technical setup based on a harmonic pattern and RSI divergence, suggesting a potential upside move.
Harmonic Pattern Setup:
A bullish butterfly pattern is forming on the EUR/GBP chart.
Point D of the pattern, also known as the Potential Reversal Zone (PRZ), is nearing a key support area. This confluence strengthens the bullish case for a reversal at this level.
Bullish RSI Divergence:
Bullish RSI divergence is observed on both the 1-hour and 4-hour timeframes. This indicates that while price may be making lower lows, the RSI indicator is not confirming the downtrend, suggesting a potential weakening of bearish momentum.
Trade Recommendation:
Take Profit Levels:
Risk Management:
Always practice proper risk management. This trade recommendation carries inherent risk. Ensure your stop-loss is set as instructed and only risk a small percentage of your capital on this trade.
Notes:
This analysis is for informational purposes only and should not be considered as investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Harmonic Pattern Setup:
A bullish butterfly pattern is forming on the EUR/GBP chart.
Point D of the pattern, also known as the Potential Reversal Zone (PRZ), is nearing a key support area. This confluence strengthens the bullish case for a reversal at this level.
Bullish RSI Divergence:
Bullish RSI divergence is observed on both the 1-hour and 4-hour timeframes. This indicates that while price may be making lower lows, the RSI indicator is not confirming the downtrend, suggesting a potential weakening of bearish momentum.
Trade Recommendation:
- Entry: Long EUR/GBP at 0.85450
- Stop Loss: 0.85240 (placed below the key support area and Point D of the butterfly pattern)
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Take Profit Levels:
- TP-1: 0.85820 (targets the 1.618 Fibonacci extension of the XA leg)
- TP-2: 0.86030 (targets the 2.618 Fibonacci extension of the XA leg)
- TP-3: 0.86240 (open target, to be adjusted based on price action)
Risk Management:
Always practice proper risk management. This trade recommendation carries inherent risk. Ensure your stop-loss is set as instructed and only risk a small percentage of your capital on this trade.
Notes:
- The harmonic pattern and RSI divergence are strong indications, but not guarantees of a bullish reversal. Confirmation from price action, such as a break above the key support area, is recommended before entering the trade.
- Market conditions can change rapidly. This analysis is based on information available at the time of writing and may not be valid in the future.
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This analysis is for informational purposes only and should not be considered as investment advice. Please consult with a qualified financial advisor before making any investment decisions.