EUR/USD Weekly Forecast – Bearish Breakdown from Rising Wedge Pattern
Pair: EUR/USD
Timeframe: 1W (Weekly)
Pattern: Rising Wedge (Bearish Reversal)
Published: April 12, 2025
By: Royalfxsignal
Pattern Explanation: Rising Wedge Breakdown
The EUR/USD pair has been forming a Rising Wedge, a technical chart pattern that typically signals a trend reversal or deeper correction. This wedge developed after a multi-month bullish recovery rally from late 2022 through 2024.
A rising wedge is a bearish structure where:
Both trendlines slope upward, but the upper trendline rises at a shallower angle, creating convergence.
Momentum wanes as price compresses into the apex of the wedge.
Eventually, price breaks down, triggering a bearish move, especially if the broader market context supports USD strength or EUR weakness.
🧠 Market Psychology Behind the Pattern
Accumulation & Optimism (Left side of the wedge): Bulls regain confidence, pushing prices up from prior lows.
Euphoria & Exhaustion (Near the wedge top): Each new high becomes weaker, signaling buyer exhaustion.
Distribution Phase (Late wedge): Smart money begins to sell as price approaches resistance, seen in failed breakouts and long wicks.
Breakdown (Post-pattern): Bearish volume increases, and late bulls get trapped. This results in a sharp decline.
Technical Breakdown of the Chart
Resistance Zone (1.11–1.12):
Price struggled to break above this horizontal level several times.
Multiple rejections show institutional-level sell pressure in that zone.
False breakouts reinforce the integrity of the level as a ceiling.
Support Zone (1.06–1.07):
Acted as a pivot in previous swing lows and inside the wedge.
Once this zone was broken, it confirmed wedge breakdown and changed market structure.
Current Breakdown:
Price has decisively broken the lower wedge support with momentum.
Price is now trading below the wedge, setting the stage for bearish continuation.
Minor pullbacks (corrective waves) may form, potentially offering retest entries near 1.08.
Trade Plan: Bearish Setup
Parameter Level
Entry Zone 1.08–1.11 (on retest)
Stop Loss 1.06788 (above recent structure high)
Take Profit 0.89396 (primary target)
Extended TP 0.89528 – aligns with support zone and historical pivot
Risk/Reward Ratio: Favorable, approx. 1:3 to 1:4 depending on entry.
Timeframe Expectation: Medium- to long-term swing, potentially 3–6 months.
🧩 Multi-Timeframe Confluence
Weekly Chart: Clear wedge structure and breakdown.
Daily Chart: Lower highs and failed bullish follow-through.
Monthly Chart: EUR/USD still within long-term bearish macro trend.
Dollar Index (DXY): Showing signs of strength, supporting the EUR/USD short bias.
️ Risk Management & Considerations
Always use a hard stop loss—false breakouts or macro news can invalidate the setup temporarily.
Do not chase the market; wait for retests or price confirmation (bearish engulfing, rejection wicks).
Stay informed on macroeconomic catalysts like ECB and Fed rate decisions or inflation data which can cause spikes or invalidate setups.
Summary
The EUR/USD weekly chart presents a high-probability bearish trade opportunity. A confirmed Rising Wedge breakdown, reinforced by repeated resistance rejection and market structure shift, provides a strong technical base for targeting lower levels. This trade aligns with broader macro sentiment and presents a favorable R:R profile.
Traders should monitor any pullback toward 1.08–1.11 as a potential entry zone, with the breakdown targeting 0.89 over the coming months.