Nearing the Top: A Final Push or Smart Money Liquidity Trap?EUR/USD – Nearing the Top: A Final Push or Smart Money Liquidity Trap?
🌍 MACRO OUTLOOK – EURO CLIMBS WHILE USD TREADS ON UNCERTAIN POLITICAL GROUND:
EUR/USD is trading just below the 1.1700 mark as investors remain cautious about the US dollar's long-term credibility. Growing concerns over the Federal Reserve’s independence — should the “Trump 2.0” scenario unfold — have weighed heavily on USD sentiment across global markets.
Meanwhile, the Euro is gaining support thanks to a relatively hawkish tone from the European Central Bank (ECB). Policymakers appear reluctant to ease policy prematurely, which supports the Euro through expectations of prolonged higher interest rates.
However, with no major catalyst in play yet, traders are watching closely for mid-tier US data and any upcoming statements from ECB officials that might set the tone for the next directional breakout.
📊 TECHNICAL ANALYSIS – H4 TIMEFRAME:
Market Structure: EUR/USD remains in a well-defined ascending price channel. However, the pair is now testing the upper band near the 1.1804 resistance, a key liquidity zone where sellers previously stepped in.
EMA Alignment: Price is trading above the EMA 13/34/89/200 cluster — a strong sign of sustained bullish momentum.
Momentum Indicators:
RSI is hovering near 70 — potential overbought territory.
ADX remains above 25 — confirming trend strength but signaling caution at extended highs.
FVG (Fair Value Gap): A visible unfilled gap between 1.1600 and 1.1640 could act as a magnetic zone for price to revisit before the next impulse move.
🔹 Key Resistance: 1.1804 – 1.1835
🔹 Key Support: 1.1640 – 1.1600 (gap zone)
🔹 Major Demand Zone: 1.1499 – 1.1515
🎯 TRADE PLAN:
Scenario 1 – Buy the Dip (Primary Bias):
Entry: 1.1600 – 1.1640
Stop Loss: 1.1550
Targets: 1.1750 → 1.1800 → 1.1850
Scenario 2 – Buy Deep Pullback:
Entry: 1.1499 – 1.1515
Stop Loss: 1.1450
Targets: 1.1640 → 1.1700
Scenario 3 – Countertrend Sell at Key Resistance (High Risk):
Entry: 1.1804 – 1.1830
Stop Loss: 1.1860
Targets: 1.1720 → 1.1650
📌 Strategic Insight:
EUR/USD may be setting up for either a breakout continuation above 1.1800 or a temporary reversal to sweep liquidity from the lower zones. Momentum favors bulls, but chasing highs without confirmation is risky. Focus on clean retracements and volume-supported entries.
💬 If EUR/USD drops back into the 1.1600 zone, will you load up for another leg higher — or wait for confirmation of trend strength? Share your view in the comments!
