FX.co ★ absh kaat | EUR/USD

I am analyzing the EUR/USD pair on the daily chart and I notice that yesterday’s price action looks very much like a test of the strong selling candlestick that was formed earlier on the 3rd, which makes me think that the market is currently trying to determine whether sellers still have enough strength to continue controlling the direction. I see that the current structure places the price between two significant daily candlesticks that represent both strong buying and strong selling pressure, and I interpret this situation as a temporary balance between bulls and bears where neither side has yet gained a decisive advantage. I observe that the market has already managed to update the local low around 1.1531 while also touching a local high near 1.1653, and I believe that this type of range expansion often signals that the market is probing liquidity on both sides before choosing its next meaningful direction. I also notice that the current price is positioned within the body of the previous buying candlestick, and I interpret this as a zone where sellers are currently trying to slow down the bullish momentum while buyers are attempting to defend their earlier positions. I think that sellers at the moment appear cautious because I do not yet see aggressive continuation to the downside, which suggests to me that they are still testing how strong the buying interest is around these levels. I also believe that if buyers were truly confident after opening positions earlier in the week, particularly on Monday, then they ideally should have confirmed their control by closing the following session with a strong bullish continuation candle. I therefore interpret yesterday’s movement primarily as a classic market test where one side attempts to challenge the strength of the opposing participants. I continue to watch this zone carefully because I believe that once the market resolves this balance between buying and selling pressure, I will likely see a clearer directional move supported by stronger momentum.

I observed that the growth scenario worked well as the market managed to push upward and form a local high at 1.1667, and I consider this level an important turning point because immediately after reaching it the bullish momentum started to weaken and the market began to reverse downward. I can now see that the price has already moved lower and is currently trading near 1.1610, which tells me that sellers have started to take control in the short term, especially when I look at the hourly chart where I can clearly identify the formation of potential sell targets based on Fibonacci expansion levels. I notice that the first and closest bearish objective is the 161.8 Fibonacci extension, which I calculate around the level of 1.1400, and I believe this level is the most realistic target in the current market conditions because I often see price reaching the first Fibonacci expansion during corrective movements. I also observe that the second bearish objective appears at the 261.8 Fibonacci level near 1.1248, and I consider this level a deeper continuation scenario that could be achieved if bearish pressure continues to strengthen and if sellers maintain control over the market structure. I also identify a much more distant third objective at the 423.6 Fibonacci level near 1.0986, and although I acknowledge that such an extension sometimes occurs during strong trends, I personally believe that this target is still too far away to treat as a near-term expectation. I therefore prefer to focus primarily on the first target while I monitor the price behavior around intermediate support zones, because I know that market participants often react to these areas before allowing the price to extend further toward deeper Fibonacci levels. I also keep in mind that the overall movement now appears to be a corrective decline after the recent bullish impulse, and I plan to watch how the price reacts as it approaches 1.1400 since I believe that this level could become an important decision point for the next directional move.