GBP/USD – Rising Wedge Breakdown in Play (H1) | Bearish Reversal

📉 GBP/USD – Rising Wedge Breakdown in Play (H1) | Bearish Reversal Trade Setup
Asset: GBP/USD (British Pound / U.S. Dollar)
Timeframe: 1-Hour (H1)
Date: April 14, 2025
Pattern: Rising Wedge
Bias: Bearish
Trade Type: Reversal/Breakdown
Risk-to-Reward: 1:2+

📊 Technical Structure Overview
This GBP/USD 1-hour chart showcases a classic Rising Wedge pattern following an extended bullish rally. The wedge has formed as price action narrows within two upward-sloping trendlines, reflecting a loss of bullish momentum despite short-term higher highs and higher lows.

The wedge begins forming after a strong bullish impulse, which started near the 1.2560 region.

The price made a parabolic rise, followed by overlapping candles and loss of volume (assumed), which is a hallmark of exhaustion.

Price rejections from the top boundary and support holding at the bottom make this an ideal wedge formation.

The wedge terminates near 1.31978, signaling the pattern is mature and ready for breakdown.

🧠 Pattern Psychology & Market Sentiment
Rising wedges typically indicate distribution — smart money exiting as retail traders buy the rally.

As price moves higher with weaker follow-through and smaller candles, it reflects diminishing buyer strength.

Bears begin stepping in, and the pattern finally collapses when demand can no longer absorb supply.

In this case, the breakdown from the wedge could lead to a sharp drop — a common feature after wedge breaks.

🧱 Key Technical Levels
Level Description
1.31978 Current Price (wedge peak, potential top)
1.31055 Take-Profit 1 (minor support / reaction zone)
1.30315 Take-Profit 2 (major support, wedge base)
1.33002 Stop Loss (above wedge invalidation zone)
Support Zone 1.3050–1.3030 (former consolidation base)
SL Zone Above 1.3300 (where bullish continuation could resume)
🎯 Trade Setup Plan
This setup offers a reversal trade opportunity based on the wedge breakdown theory:

✅ Entry Conditions:
Wait for breakdown below the wedge's lower trendline (confirmed on H1 candle close).

Preferably, enter after a retest of the broken support as resistance, which offers confirmation.

🛑 Stop-Loss (SL):
Above recent swing high: 1.3300, safely above the wedge's upper boundary.

🎯 Take Profits (TP):
TP1: 1.3105 → First support level; take partials.

TP2: 1.3031 → Completion of wedge's measured move, strong support base from prior price action.

📐 Measured Move:
The vertical distance from the wedge’s start to its peak is projected downward from the breakdown point to estimate TP2.

📌 Additional Confluences
The wedge breakdown aligns with broader price exhaustion behavior visible in similar FX majors.

The pair is potentially topping near a round number (1.3200), which acts as psychological resistance.

No major bullish divergence on RSI (assumed), adding weight to the bearish bias.

📅 Event Risk & News Impact
Always consider the macroeconomic calendar before entering:

GBP/USD is sensitive to both UK economic releases (GDP, CPI, BoE statements) and US data (CPI, PPI, FOMC).

High-impact news during the breakdown can either accelerate or fake out the move — trade cautiously.

📘 Trade Summary
Entry Zone ~1.3180–1.3160 (on breakdown/retest)
SL 1.3300 (structure invalidation)
TP1 1.3105 (initial target)
TP2 1.3031 (measured move, key support)
R:R Potential 1:2+ depending on entry timing
Confirmation? Prefer breakdown candle + retest rejection
📢 Final Thoughts
The GBP/USD 1H chart presents a compelling bearish reversal opportunity. With the Rising Wedge pattern nearing completion, a clean breakdown can trigger a short-term correction toward lower support zones. Patience for confirmation and solid risk management will be key to maximizing this setup's potential.