EURUSD – Rebalancing Before Repricing HigherEURUSD is currently trading within a corrective phase after failing to sustain its bullish momentum from the earlier impulsive rally. The market structure on the 1-hour chart shows a clean breakdown from recent highs, with sellers starting to step in more aggressively. This pullback feels more like a calculated retracement than a complete trend reversal, and the market may be seeking out a deeper discount before any continuation higher. With multiple rejections forming at lower highs and downside pressure increasing, it looks like EURUSD wants to drive lower first before making a run for higher levels.
Consolidation Structure
We’ve been consolidating after the last upward push, forming a short-term range with price grinding sideways but gradually bleeding lower. What stands out is the clear cluster of equal lows forming, acting as obvious sell-side liquidity. Just below that area sits a 1-hour fair value gap that remains unmitigated, offering a strong magnet for price. The FVG sits just beneath the golden pocket zone, which adds more confluence for a potential reaction from that area. This range looks designed to draw in early buyers, only to flush them out before price finds real support.
Bearish Scenario – Setup for a Deeper Retracement
Right now, the structure leans bearish in the short term. The market looks like it wants to run the lows and wick into the 1-hour fair value gap sitting below the golden pocket. This area is an unmitigated imbalance that lines up perfectly with the idea of a final liquidity grab. I’m expecting price to reach down into that gap, around the 1.112 region, before any kind of reversal occurs. The goal of this move would be to clear out stops and rebalance the inefficiency from the previous rally, setting the stage for the next leg higher.
Bullish Scenario – Reversal from Discount
Once price trades into the 1.112 zone and sweeps the current lows, the setup for a bullish reversal becomes much cleaner. That area offers a combination of liquidity, inefficiency, and fib confluence, making it a high-probability level for buyers to step back in. If we get a solid rejection or displacement out of that level, the upside potential opens up quickly. The idea is that after this corrective move and stop hunt, the market reclaims momentum and starts driving toward the next key structure zone.
Price Target and Expectations
If price delivers the expected sweep and mitigation into 1.112, I’ll be looking for confirmation of bullish intent and signs of strength to enter long. The target sits much higher, all the way at the 0.28 fib level, which is around 1.20. That level offers a logical take-profit zone based on fib projection and structure alignment. The potential reward-to-risk on this move is excellent if the entry holds and the displacement confirms. This would essentially be a play on manipulation and continuation, classic liquidity run before expansion.
Conclusion
EURUSD is setting up nicely for a textbook sweep-and-reverse play. The market is currently moving lower, and I’m expecting that move to extend into the 1-hour FVG just below the golden pocket, targeting an entry near 1.112. From there, if price reacts cleanly, the next leg should aim for the 0.28 fib level at 1.20. All the ingredients are there: a clean imbalance, obvious liquidity to take, and a higher-timeframe fib target to anchor the move. Just need to wait for price to do its job and follow the plan.
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