Cup & Handle Pattern on EUR/USD – Bullish Breakout Setup

🏗️ 1. Pattern Structure Breakdown
🔵 Cup Formation:
The left side of the chart illustrates a steep decline beginning around mid-October 2024, forming the left lip of the cup.

The bottom of the cup was established between late December 2024 and early February 2025, where the market found a strong support level near 1.0220.

A rounded bottom formed, which indicates accumulation and decreasing bearish momentum.

The right side of the cup shows a strong bullish reversal from the support zone, gradually returning to the previous highs around 1.1050–1.1100, completing the cup shape.

⚫ Handle Formation:
A slight pullback or consolidation occurred after reaching the resistance zone, forming the handle between late March and early April 2025.

This handle appears as a small descending channel or flag, which is typical for this pattern.

Price remained above the support trendline, showing strength in the handle without breaking the overall bullish structure.

🔍 2. Key Technical Zones
📌 Resistance Level (Breakout Zone): 1.1050 – 1.1100
Marked by prior price rejection and the top of the cup.

The successful breakout above this zone confirms the cup and handle breakout.

📌 Support Level: 1.0220 – 1.0300
This zone provided a base during the cup’s rounding bottom and serves as a critical demand area.

📌 Stop Loss: 1.07380
Positioned below the recent swing low (handle low), providing a safe buffer.

This placement respects both market structure and risk management.

🎯 3. Target Projection
✅ Price Target: 1.14780
Based on the measured move technique:

Measure the depth of the cup (approx. 1.1100 - 1.0220 = 880 pips).

Project that distance above the breakout point (around 1.1050).

Target = 1.1050 + 0.0880 = 1.1930 (but a conservative target of 1.14780 is used here).

This target aligns with a previous resistance level from mid-2023, adding confluence.

📈 4. Trade Setup Summary
Component Description
Pattern Cup and Handle (Bullish Continuation)
Entry Point Breakout above 1.1050 resistance
Stop Loss Below 1.0738 (recent low)
Target 1.1478 (based on measured move)
Risk/Reward Ratio Approx. 1:2.5 or better
💡 5. Technical Insights and Confluence
Volume Consideration (if available): Typically, volume decreases during the cup and increases during the breakout. Although volume is not shown here, this pattern suggests accumulation.

Handle Behavior: The handle did not breach the mid-point of the cup, maintaining a strong bullish structure.

Market Sentiment: Given the steady incline and the bullish breakout, it suggests buyers are in control.

🏁 Conclusion
This is a textbook Cup and Handle breakout setup on the EUR/USD daily chart. The structure shows a clear transition from bearish to bullish sentiment, accumulation at support, and a confirmed breakout with strong potential upside.

It offers an excellent long opportunity with favorable risk-reward, clear invalidation, and a historically reliable price pattern.