EUR/USD Daily Price Forecast – 26th May 2025

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Trade Summary:

EURUSD
Buy Stop @ 1.14248
TP @ 1.14638
SL @ 1.13545

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EUR/USD Analysis (H4 Chart)

Overview

The EUR/USD chart provided is a 4-hour (H4) timeframe, showing a bullish trend with key levels marked for a potential trade setup. The chart includes moving averages, which help identify the trend direction, and horizontal levels for entry, stop-loss (SL), and take-profit (TP).

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Key Observations

• Trend Analysis:

  • The price is in a clear uptrend, as indicated by the higher highs and higher lows.

  • The moving averages (yellow and red lines) are aligned in a bullish configuration, with the shorter-term moving average (yellow) above the longer-term moving average (red). This confirms bullish momentum.

• Key Levels:

  • Buy Stop: 1.14248
    This level is marked as the entry point for a long position. It is slightly above the current price, indicating a breakout strategy.

  • Stop Loss (SL): 1.13545
    The stop-loss level is placed below a recent swing low, providing protection against downside risk.

  • Take Profit (TP): 1.14688
    The take-profit level is set near a previous resistance zone, ensuring a favorable risk-to-reward ratio.

• Support and Resistance:

  • The 1.13545 level acts as a strong support zone, as it aligns with a previous consolidation area.

  • The 1.14688 level is a resistance zone, as it coincides with a prior price rejection.

• Candlestick Patterns:

  • Recent bullish candlesticks with strong momentum suggest buyers are in control.

  • No significant reversal patterns are visible, supporting the continuation of the uptrend.

• Moving Averages:

  • The shorter-term moving average (yellow) is sloping upward, indicating strong bullish momentum.

  • The longer-term moving average (red) is also trending upward, confirming the overall bullish trend.

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Trade Setup

• Entry: Place a Buy Stop order at 1.14248 to capitalize on a breakout above the current resistance.

• Stop Loss: Set at 1.13545, below the recent swing low, to limit downside risk.

• Take Profit: Target 1.14688, near the next resistance level, for a favorable risk-to-reward ratio.

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Risk-to-Reward Ratio

• Risk: The difference between the entry price (1.14248) and the stop-loss (1.13545) is 70.3 pips.

• Reward: The difference between the entry price (1.14248) and the take-profit (1.14688) is 44 pips.

• Risk-to-Reward Ratio: Approximately 1:0.63. While the ratio is less than ideal, the trade aligns with the prevailing trend, which increases the probability of success.

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Conclusion

The EUR/USD pair is in a strong uptrend, supported by bullish momentum and favorable moving average alignment. The proposed trade setup is a breakout strategy, targeting a move to the next resistance level. However, traders should monitor for any signs of reversal or weakening momentum before entering the trade. Adjustments to the stop-loss or take-profit levels may be necessary based on market conditions.

Recommended Lot Size

Trading is all about statistics.

While we can experience winning streaks, we can also suffer from losing streaks.

As such, we should always size each trade to withstand losing streaks (if any).

It's widely recommended that you should not risk more than 2% of your capital for each trade.

We believe it's easier to control your lot size by limiting your lot sizing to 0.01 for every $500 in your account.

So if you have $5000, then risk no more than 0.10 lot size per trade.

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If you spot a mistake especially when it comes to the price, please use common sense and check the chart.

We wish you good luck and good profit for this trade idea.

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