Low-Risk Opportunity in EUR/USD Near Key Supply ZoneMarket Overview:
In the 1-hour timeframe, the FX:EURUSD pair has shown a Break of Structure (BOS) to the upside, indicating a potential bullish momentum. The price is currently approaching a significant H4 supply zone, which could act as a strong resistance area.
Supply and Demand Analysis:
H4 Zone (Supply): This zone represents a potential area where sellers might step in, leading to a price reversal.
H1 Zone (Demand): This lower zone can act as a strong support area if the price retraces, offering a potential entry for buyers.
Recommended Strategy:
Given the current market structure, the least risky direction appears to be shorting from the H4 supply zone, as the price is more likely to encounter resistance here.
Entry, Stop-Loss, and Take-Profit:
Entry: Monitor the H4 supply zone for bearish confirmation before entering a short position.
Stop-Loss (SL): Place above the H4 supply zone to protect against a false breakout.
Take-Profit (TP): Target the H1 demand zone for a favorable risk-to-reward ratio.
Recommendation:
This setup suggests a good opportunity to short EUR/USD as it approaches the H4 supply zone. Traders should look for bearish price action signals in the supply zone to confirm the entry. Proper risk management is crucial, and adjusting the stop-loss to break even once the trade is in profit is advised.
Happy trading!
