The EUR/USD currency pair is moving between two important price levels. The top level is 1.1454 and the bottom level is 1.1357. This means the price is staying inside a range. Yesterday, the price of EUR/USD went above the top level of 1.1454. By doing this, it triggered many stop-loss orders from traders who were expecting the price to go down. These traders had placed their stop-losses just above this level, and the market moved up to take them out.
Current support of the 1H FVG
Now, the price is starting to go down again. It is getting closer to the lower level of the range, which is around 1.1357. There is a chance that the market will go below this level as well. If that happens, it may take out the stop-loss orders of traders who are expecting the price to go up. These traders often place their stop-losses just below the low point of the range. When the market goes below the low, it collects liquidity. In simple words, it grabs the orders that are waiting there.
Looking at the chart, we can see that EUR/USD has found some support at the 1-hour Fair Value Gap (1H FVG). This area is acting like a short-term floor for the price. If a full 1-hour candle closes below this support area, then the price will likely fall further. In that case, it may reach the bottom of the range and possibly move below it to take out more stop-losses.
Why below support?
But why would the market go below the low on purpose? The reason is that many retail traders, those are small traders who trade from home, often put their stop-losses just below the recent low. If the market moves there, it activates those stop-losses. These stop-losses are usually sell orders, and when they get triggered, it gives the market extra selling power. After collecting this liquidity, the market often uses the new buying interest (from other traders entering long positions) to push the price back up again.
Conclusion
So in summary, the EUR/USD is still inside a range. It has already moved above the top to take out stop-losses, and now it might go below the bottom to do the same. After that, there could be a strong move upward, powered by the new liquidity in the market.
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Current support of the 1H FVG
Now, the price is starting to go down again. It is getting closer to the lower level of the range, which is around 1.1357. There is a chance that the market will go below this level as well. If that happens, it may take out the stop-loss orders of traders who are expecting the price to go up. These traders often place their stop-losses just below the low point of the range. When the market goes below the low, it collects liquidity. In simple words, it grabs the orders that are waiting there.
Looking at the chart, we can see that EUR/USD has found some support at the 1-hour Fair Value Gap (1H FVG). This area is acting like a short-term floor for the price. If a full 1-hour candle closes below this support area, then the price will likely fall further. In that case, it may reach the bottom of the range and possibly move below it to take out more stop-losses.
Why below support?
But why would the market go below the low on purpose? The reason is that many retail traders, those are small traders who trade from home, often put their stop-losses just below the recent low. If the market moves there, it activates those stop-losses. These stop-losses are usually sell orders, and when they get triggered, it gives the market extra selling power. After collecting this liquidity, the market often uses the new buying interest (from other traders entering long positions) to push the price back up again.
Conclusion
So in summary, the EUR/USD is still inside a range. It has already moved above the top to take out stop-losses, and now it might go below the bottom to do the same. After that, there could be a strong move upward, powered by the new liquidity in the market.
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.
- Make sure to follow me so you don't miss out on the next analysis!
- Drop a like and leave a comment!
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🔹 Free trading signals
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Pubblicazioni correlate
Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.