Introduction
Last Friday, the EURUSD experienced a sharp move to the upside following Jerome Powell’s speech, which fueled optimism and created strong bullish momentum. However, the market could not sustain this rally, and by yesterday all the gains were fully retraced. Price dropped back into the bullish inversion fair value gap (FVG), ultimately filling it entirely. While this retracement has cooled off the bullish pressure, it has also introduced some new dynamics into the market that traders should be aware of.
Liquidity sweep
During Friday’s impulsive rally, EURUSD swept liquidity above the recent highs and simultaneously filled all the bearish fair value gaps. This move, while initially strong, did not manage to establish a sustainable break above those highs. As a result, bearish momentum began to reappear, suggesting that the rally was more of a liquidity grab rather than the start of a prolonged bullish trend.
Bullish case scenario
The bullish scenario from here would require EURUSD to reclaim strength and invalidate the recently formed bearish 4-hour FVG. For this to happen, the pair would need a decisive 4-hour candle close above this zone, signaling renewed upside momentum. Should buyers manage to achieve this, the next logical target would be another attempt at the highs that were swept on Friday. A confirmed break above those levels would strengthen the bullish case and potentially open the path to higher price levels.
Bearish case scenario
On the other hand, the bearish scenario appears more probable if EURUSD faces rejection at the bearish 4-hour FVG. A failure to break above this area would confirm that the bearish momentum is still in play. If that occurs, price will likely seek liquidity by moving lower, potentially targeting the bullish 4-hour FVG that sits beneath the liquidity zone. This move would align with the broader bearish structure and reinforce the idea that the market remains under selling pressure despite Friday’s rally.
Final thoughts
In conclusion, EURUSD is currently at a critical juncture, with both bullish and bearish scenarios still on the table. The decisive factor will be how price reacts around the bearish 4-hour FVG. A strong close above could set the stage for a continuation to the upside, while rejection from this zone would likely lead to a liquidity grab to the downside and a revisit of lower fair value gaps. Traders should remain cautious and patient, waiting for clear confirmations before committing to a direction, as the market continues to balance between bullish hopes and bearish pressure.
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Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Thanks for your support. If you enjoyed this analysis, make sure to follow me so you don't miss the next one. And if you found it helpful, feel free to drop a like 👍 and leave a comment 💬, I’d love to hear your thoughts!
Last Friday, the EURUSD experienced a sharp move to the upside following Jerome Powell’s speech, which fueled optimism and created strong bullish momentum. However, the market could not sustain this rally, and by yesterday all the gains were fully retraced. Price dropped back into the bullish inversion fair value gap (FVG), ultimately filling it entirely. While this retracement has cooled off the bullish pressure, it has also introduced some new dynamics into the market that traders should be aware of.
Liquidity sweep
During Friday’s impulsive rally, EURUSD swept liquidity above the recent highs and simultaneously filled all the bearish fair value gaps. This move, while initially strong, did not manage to establish a sustainable break above those highs. As a result, bearish momentum began to reappear, suggesting that the rally was more of a liquidity grab rather than the start of a prolonged bullish trend.
Bullish case scenario
The bullish scenario from here would require EURUSD to reclaim strength and invalidate the recently formed bearish 4-hour FVG. For this to happen, the pair would need a decisive 4-hour candle close above this zone, signaling renewed upside momentum. Should buyers manage to achieve this, the next logical target would be another attempt at the highs that were swept on Friday. A confirmed break above those levels would strengthen the bullish case and potentially open the path to higher price levels.
Bearish case scenario
On the other hand, the bearish scenario appears more probable if EURUSD faces rejection at the bearish 4-hour FVG. A failure to break above this area would confirm that the bearish momentum is still in play. If that occurs, price will likely seek liquidity by moving lower, potentially targeting the bullish 4-hour FVG that sits beneath the liquidity zone. This move would align with the broader bearish structure and reinforce the idea that the market remains under selling pressure despite Friday’s rally.
Final thoughts
In conclusion, EURUSD is currently at a critical juncture, with both bullish and bearish scenarios still on the table. The decisive factor will be how price reacts around the bearish 4-hour FVG. A strong close above could set the stage for a continuation to the upside, while rejection from this zone would likely lead to a liquidity grab to the downside and a revisit of lower fair value gaps. Traders should remain cautious and patient, waiting for clear confirmations before committing to a direction, as the market continues to balance between bullish hopes and bearish pressure.
-------------------------
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Thanks for your support. If you enjoyed this analysis, make sure to follow me so you don't miss the next one. And if you found it helpful, feel free to drop a like 👍 and leave a comment 💬, I’d love to hear your thoughts!
Trade active
Looks like we are heading lower. It is now consolidating before a likely further drop. It took the liquidity at the lows but still see a probability to visit the bullish 4h FVG 
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🔸 Free trading Discord
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🔹 Free trading signals
t.me/CandleCollective
discord.gg/fVfJHHQSMG
🔹 Free trading signals
t.me/CandleCollective
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.