$EURUSD

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Looking at the 1-hour timeframe, the market structure has recently shifted from a bearish impulse to a consolidation phase. After a sharp drop from the highs near 1.11027 down to the 1.10457 liquidity grab, price has stopped making lower lows and is currently forming a base. The structure is attempting to transition into a bullish correction or reversal as price pushes back above the short-term moving averages (WMA5 and WMA10) and tests the middle Bollinger Band.

The K-line action shows a series of small-bodied candles with mixed colors, indicating indecision and a compression in volatility. Price is currently sandwiched between the WMA20 (1.10536) acting as dynamic support and the upper Bollinger Band (1.10710) as resistance. The current candle is attempting to break the equilibrium, but volume appears light. The MACD is showing a bullish crossover below the zero line, which historically suggests momentum is shifting to the upside, though the signal is weak.

The most prominent recent pattern was the "Morning Star" style formation near 1.10457, which rejected further downside. Currently, we are seeing "Doji" and "Spinning Top" candles, which represent a pause in the trend. The recent small green candle suggests buyers are stepping in, but they lack conviction until a clear break of the 1.1060 level occurs.

Which Trade Setup is Better?

The best setup for this specific chart time is a "Mean Reversion" or "Bollinger Band Squeeze" breakout. The price is hugging the middle band, and a breakout above 1.1060 targeting the upper band is the highest probability setup. Alternatively, a "Double Bottom" setup is valid if price retests 1.10457 without breaking it.

I predict a short-term bullish move. Since the price is holding above the WMA20 and the MACD is trying to cross bullish, the path of least resistance is up. I expect price to test the 1.1070-1.1075 region (upper Bollinger Band) before encountering significant supply.

What Trade Plan I Follow and Why❓️

I am following a Long (Buy) Scalp plan. My reason is the "Bollinger Squeeze" and the failure of bears to push below 1.1045. The convergence of the moving averages (WMA5, 10, 20) suggests a build-up of energy. I will enter Long as long as price holds above 1.10536 (WMA20).

When I Start My Trade❓️

I will start my trade if the 1-hour candle closes firmly above 1.1060. This confirms that the buyers are ready to break the current resistance and the WMA cluster. If price breaks below 1.1050, I will invalidate this long bias.

Bullish Bias. The chart is oversold recovering. Long entry above 1.1060 with a stop loss at 1.1045 (below the recent wick) and a take profit at 1.1075. Wait for the candle close to confirm the breakout.