EURUSD SHORT SETUP Smart Money Play for EURUSD
The goal is to wait for a pullback to resistance within this bearish trend, then position for a continuation downwards. Here’s a structured approach:
1. Look for a Pullback to Resistance:
• Since price is in a previous consolidation range, watch for a pullback to a level of resistance, possibly near the upper bounds of this range. For instance, look at levels like a daily moving average (20 or 50 SMA) or a high-volume node in the volume profile, which could act as strong resistance.
• Use the 4-hour Ichimoku Conversion Line or Base Line as a short-term resistance level. If price approaches but stays below these levels, it may signal a solid area to enter short.
2. Volume Confirmation:
• During the pullback, if volume remains low or the Chaikin Oscillator stays negative, it would signal that the buying pressure is weak, making a continuation downwards more likely.
• Look for the CMF and ADL to remain bearish, as confirmation that the broader selling pressure is intact.
3. Wait for a Clear Reversal Signal on the Lower Timeframe (4-Hour or 1-Hour):
• Use the 4-hour chart to refine your entry. Wait for the RSI to re-enter bearish territory and for MACD to regain momentum on the downside.
• Alternatively, a bearish Supertrend signal or a breakdown below the 4-hour Ichimoku Conversion Line after a weak pullback can serve as an entry trigger.
4. Downside Targets:
• Set initial targets at recent lows within the consolidation range, as well as potential Fibonacci extension levels for the swing down.
• If the daily downtrend continues to accelerate, you may consider trailing stops to capture a larger movement as long as price remains below the daily Ichimoku cloud.
Summary of Smart Money Play
1. Trend Bias: Stay with the trend (bearish).
2. Setup: Wait for a pullback to resistance within the bearish trend, ideally near a moving average or high-volume node.
3. Entry Trigger: Confirm selling pressure resumes on the 4-hour or 1-hour chart.
4. Risk Management: Use recent highs or a level above the resistance as a stop, and target lower lows, with the option to trail the stop as long as bearish indicators align.
