EUR/USD Technical Analysis: Potential Long EntryEuro / United States DollarCMCMARKETS:EURUSDlabagoldPrior Trend: The price action from September 16th to around September 22nd shows a period of upward movement followed by a sharp drop. Channel/Pattern: A downward-sloping channel (sometimes called a parallel channel or a descending channel) has been drawn, indicating that the price has been consolidating and moving lower within a defined range since the major drop around September 22nd. This suggests a short-term bearish (downward) trend or a correction within a larger trend. The Proposed Trade Setup (Long Position) The rectangular box and lines drawn on the right represent a specific trade plan, likely a long (buy) entry based on a technical reversal or a break of the channel. ElementPrice Level (Approx.)Interpretation Entry (Yellow Box)1.16257 to 1.16489This is the proposed buy zone. It suggests entering a long trade if the price either pulls back into this area or stabilizes here. Stop Loss (Red Line/Box)1.16259 (or just below 1.16257)This is the maximum loss limit. If the price falls to this level, the trade would be closed to prevent further losses. This stop loss is placed very close to the entry, indicating a high-risk/high-reward or aggressive setup. Take Profit (Upper Black/Yellow Line)1.18553 to 1.18560This is the target price. The goal is for the price to reach this level, which would be a significant move back toward the highs seen mid-September. Export to Sheets Technical Interpretation of the Setup Potential Reversal Signal: The price has recently broken the upper boundary of the descending channel (seen with the small red and green candles on the 26th and 27th). The dashed white line inside the channel may represent the channel's midpoint, and the price is now moving above the lower half. Trade Idea: The small red/purple lines drawn near the current price suggest a possible short-term pullback back into the buy zone (1.16257−1.16489) before a major move upward (the large red line). This is a common strategy: wait for a retest of a broken resistance (the channel top, which now acts as support) before entering. Risk/Reward Ratio: The distance to the stop loss is very small compared to the distance to the take profit. Risk: ≈23 pips (1.16489−1.16259). Reward: ≈206 pips (1.18553−1.16489). This gives a very attractive Risk/Reward Ratio of over 8:1 (Reward / Risk), which is excellent if the trade works out. Key Considerations Aggressive Stop Loss: The stop loss is extremely tight. A small fluctuation or "noise" in the market could trigger the stop loss, leading to a loss even if the price eventually moves up toward the target. Target: The Take Profit target at ∼1.18560 is quite ambitious and represents a complete retracement of the recent sell-off. For this target to be reached, a significant shift in market sentiment or a major fundamental driver (like a news announcement) would likely be required. Trend Confirmation: For this trade to be successful, the price needs to confirm that the downward channel is definitively broken and that a new upward trend is beginning. In summary, the chart outlines a high-conviction, high-risk/high-reward long trade based on a potential breakout and reversal from a short-term descending channel.