My analysis for EUR/USD (EU) this week is similar to GBP/USD (GU). The pair has been very bullish and is now approaching key supply areas where I will be looking to sell short-term, just until price reaches another valid demand level. From there, I plan to buy back up, expecting it to create a new leg to the upside.
If price breaks through the 20-hour supply zone, there's a 16-hour supply zone just above it that looks more promising, as it's in a premium area. With the news events this week looking favorable and few major risks ("red folders"), Monday might see price slow down and form a distribution pattern.
Confluences for EU Sells:
- Price has been very bullish, so a retracement is needed to sustain the upward movement.
- Recent price action has been very parabolic, resulting in unhealthy market behavior.
- There are imbalances and liquidity below that need to be filled.
- The 20-hour supply zone presents a potential opportunity for short trades.
P.S. If price melts from this zone, I'll look for an Asia high sweep followed by my usual setup. I expect price to fill the imbalance below and tap into my demand area.
If price breaks through the 20-hour supply zone, there's a 16-hour supply zone just above it that looks more promising, as it's in a premium area. With the news events this week looking favorable and few major risks ("red folders"), Monday might see price slow down and form a distribution pattern.
Confluences for EU Sells:
- Price has been very bullish, so a retracement is needed to sustain the upward movement.
- Recent price action has been very parabolic, resulting in unhealthy market behavior.
- There are imbalances and liquidity below that need to be filled.
- The 20-hour supply zone presents a potential opportunity for short trades.
P.S. If price melts from this zone, I'll look for an Asia high sweep followed by my usual setup. I expect price to fill the imbalance below and tap into my demand area.
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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.