In this EUR/USD 4-hour chart, the price has entered a corrective phase after a strong bearish trend, and by breaking the descending trendline, it has shifted the market structure toward a bullish outlook. The recent upward movement has pushed the price into a key supply zone marked in blue, an area that has shown significant reactions in the past. The price’s inability to break through this zone highlights the strong presence of sellers at the 1.1650 region.
On the other hand, a 4H Fair Value Gap (FVG) within the yellow zone serves as a potential support area. Additionally, the green zone, which aligns with market structure and mid-range retracement levels, may act as a liquidity-gathering region where buyers could re-enter the market. The reaction to this zone is crucial, as maintaining this support could initiate another bullish wave and lead to another attempt at breaking the major supply zone near 1.1650.
If the price fails to hold these support zones and breaks below the current structure in EURUSD Chart, the likelihood of a deeper move toward previous lows increases. A breakdown below the green support zone could invite further selling pressure, driving the price toward lower levels such as the 1.1500 area, signaling a potential return to the overall bearish trend.
Overall, EUR/USD is currently positioned between a strong supply zone and several important support areas. Price action within these key levels will determine the next directional move. Observing how the price behaves around the green support zone and its reaction to the upper resistance will be critical in identifying whether the next dominant scenario will be bullish or bearish.
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