The trend is your friend... until it isn't. While EURUSD remains in a clear global uptrend, the short-term picture is far more deceptive. Before you jump into a long position, it's crucial to understand the bearish order flow that has taken control on the 4H chart.
This idea isn't about fighting the trend, but about having the patience to join it at the right, high-probability moment. Let's dive in.
The most liquid forex asset, EURUSD, continues its global uptrend as long as the price does not close decisively below the daily structure's BOS level at 1.14458. On its ascent, the pair met resistance from a monthly supply zone, from which it began a daily structure correction. This correction was paused by a demand zone and the 61.8% Fib level.
While this might seem like a sufficient support point to consider long positions, let's look at the context on the 4H structure to see why I believe the correction will go deeper.
The 4H structure shows a clear bearish order flow that began from the aforementioned monthly supply zone. We see this order flow manifest as the price consecutively rejects from order blocks #1 and #2 (they have fulfilled their role and should no longer be considered — any manipulation zone becomes deactivated after its first mitigation). It would have seemed logical for the price to then reject from OB #3, where I was personally expecting a counter-trend short trade upon its mitigation, especially after the 4H structure had broken down (BOS 4H).
However, the price doesn't always behave as we expect; it dropped to the demand zone, leaving behind a 4H FVG. This left OB #3 still technically valid. But the sharp squeeze on July 16th reached the 4H FVG, rebalancing it and thus invalidating OB #3 as a Point of Interest (POI) for large capital. This is because the price was already delivered close to it, and with a high probability, the "Whale" closed its losing hedged long positions there, having no reason to return the price. The sharp upward squeeze on July 16th also served to sweep liquidity from the high marked with an 'x'.
These two factors — the FVG mitigation and the liquidity sweep — confirmed the continuation of the bearish order flow and indicated that the price is likely to continue its corrective move towards the next support levels. Let's examine them in more detail.
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Two Potential Long Scenarios
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The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this wonderful, advanced TV community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always use a stop-loss and proper risk management. Trade smart.
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Have a question or your own view on this idea? Share it in the comments. 💬
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This idea isn't about fighting the trend, but about having the patience to join it at the right, high-probability moment. Let's dive in.
The most liquid forex asset, EURUSD, continues its global uptrend as long as the price does not close decisively below the daily structure's BOS level at 1.14458. On its ascent, the pair met resistance from a monthly supply zone, from which it began a daily structure correction. This correction was paused by a demand zone and the 61.8% Fib level.
While this might seem like a sufficient support point to consider long positions, let's look at the context on the 4H structure to see why I believe the correction will go deeper.
The 4H structure shows a clear bearish order flow that began from the aforementioned monthly supply zone. We see this order flow manifest as the price consecutively rejects from order blocks #1 and #2 (they have fulfilled their role and should no longer be considered — any manipulation zone becomes deactivated after its first mitigation). It would have seemed logical for the price to then reject from OB #3, where I was personally expecting a counter-trend short trade upon its mitigation, especially after the 4H structure had broken down (BOS 4H).
However, the price doesn't always behave as we expect; it dropped to the demand zone, leaving behind a 4H FVG. This left OB #3 still technically valid. But the sharp squeeze on July 16th reached the 4H FVG, rebalancing it and thus invalidating OB #3 as a Point of Interest (POI) for large capital. This is because the price was already delivered close to it, and with a high probability, the "Whale" closed its losing hedged long positions there, having no reason to return the price. The sharp upward squeeze on July 16th also served to sweep liquidity from the high marked with an 'x'.
These two factors — the FVG mitigation and the liquidity sweep — confirmed the continuation of the bearish order flow and indicated that the price is likely to continue its corrective move towards the next support levels. Let's examine them in more detail.
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Two Potential Long Scenarios
- SCENARIO 1: Entry from the Daily Order Block
The first level for a potential reversal is the 78.6% Fibonacci retracement level from the daily structure, in conjunction with a daily order block.
► Setup Condition: Price must reach this level, mitigate the order block, and hold above the 78.6% Fib level. An entry will require LTF confirmation (a BOS or the beginning of LTF order flow).
► Invalidation: A break of the 78.6% level with the price closing below it.
Note: I consider the scenario of breaking this level quite probable due to the weakness of this daily order block — it did not sweep any liquidity when it was formed. Thus, it may itself act as liquidity, activating the second long scenario. - SCENARIO 2: Entry after a Deeper Liquidity Sweep
This scenario becomes valid if the first one fails.
► Setup Condition: A liquidity sweep below the daily structure's break level (BOS D), which simultaneously corresponds to reaching the 50% Fib level from the weekly structure. This confluence strongly reinforces the setup if this level (at 1.14480) holds. Since this is a weekly level, it must not be broken by the bodies of daily candles closing below it.
► Invalidation: A daily candle close below this level. In that case, we can confidently assume that the uptrend is changing and start looking for short positions.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this wonderful, advanced TV community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always use a stop-loss and proper risk management. Trade smart.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If you found this analysis helpful, support it with a Boost! 🚀
Have a question or your own view on this idea? Share it in the comments. 💬
► Follow me on TradingView to get real-time updates on THIS idea (entry, targets & live trade management) and not to miss my next detailed breakdown.
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Note
The price did not immediately move to the potential reversal levels I outlined in the long setup conditions. This is because the 61.8% level, in conjunction with the demand zone, has so far halted the continuation of the bearish corrective move, and the price is now consolidating in a range on the 4H structure. During this, an order block was formed after a deviation below.Within a range, price action is completely unpredictable; from current levels, the price could go down to mitigate this order block just as easily as it could go up to the upper boundary of the range or even for a second deviation above. What can be said with some certainty now is that the price will likely remain within the range today, with a breakout expected next week.
It doesn't matter how or how long the price moves inside this range; what matters is which direction it breaks out. My bias remains that there is a higher probability of the price breaking out to the downside towards one of the next corrective levels. So for now, I am simply waiting to see how events unfold on this asset. I will keep you updated as the situation develops.
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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.
Related publications
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.