EUR/USD 4H Challenge
Past challenge from 2026-03-22. See the correct answer and explanation below.
SCENARIO
EUR/USD is at 1.0780. After a strong downtrend, price has formed a falling wedge pattern on the 4H chart. The upper trendline is at 1.0810 and the lower at 1.0750. Price is near the apex of the wedge. Volume has been decreasing throughout the pattern. A small bullish candle just closed at the lower trendline.
Market Context
Eurozone PMI data improved for the second month. ECB officials are talking about holding rates steady. Markets are pricing in a potential ECB rate cut pause.
Key Levels
Falling wedges are typically bullish reversal patterns. Decreasing volume during the pattern and improving Eurozone fundamentals support the bullish breakout thesis. Wait for a 4H close above the upper trendline at 1.0810 for confirmation. Place a buy stop at 1.0815 with a stop at 1.0745 (below the lower trendline) targeting 1.0850 (measured move). R:R is approximately 1:0.7, so this is a pattern-confirmation trade -- only enter on the breakout.
Prop Firm Implications
The 4H timeframe means this trade may take 1-2 days to play out. Ensure your FTMO account allows overnight holding for forex positions.