Saad Ullah
Smart money traders saw a textbook setup play out on EUR/USD as the pair bounced from a 4-hour demand zone and delivered a swift +1.8R move. The confluence? A clean Fair Value Gap (FVG) on the 5-minute chart, SMT divergence with the U.S. Dollar Index (DXY), and a precise return into a previously marked imbalance area.
According to a trader post on X, the combination of 4H IRL, 5M FVG, and SMT with $DXY created the ideal conditions for a low-risk, high-reward long entry.
4H Imbalance Zone Sets the Stage
The first chart shows how EUR/USD tapped into a 4-hour IRL zone (imbalance return level) around 1.1587 — an area that had previously acted as demand. The pair rejected sharply, forming a bullish candle with significant range expansion.
This area was highlighted in advance as a possible reaction point, and price action respected it with precision. The move also followed a liquidity sweep to the downside, as shown by the wick into the sell-side liquidity zone, making it a classic “stop hunt and reverse” scenario.
The chart also marks SMT divergence with the DXY, suggesting EUR/USD was showing strength while the dollar failed to follow through. This intermarket divergence is a key signal for many institutional-style traders.
Clean 5M Fair Value Gap Entry Confirmed
Drilling down to the 5-minute chart, a Fair Value Gap (FVG) between 1.1609–1.1614 formed just before the move began. As price retraced, it filled the imbalance before continuing higher — offering a precise entry for those waiting for confirmation.
The short-term push brought EUR/USD up to 1.1626, where the move stalled and began to consolidate. From entry to exit, this play yielded a +1.8R gain with minimal drawdown — exactly the kind of setup traders hunt for.
What makes this trade particularly valuable is the alignment of concepts:
- Liquidity sweep on higher timeframe (4H)
- SMT divergence with DXY confirming internal strength
- Entry on short-term imbalance (5M FVG) This is a prime example of how smart money concepts work across timeframes.
Conclusion
The EUR/USD trade shared by YogeshOptions demonstrates the power of patience, planning, and precision. With price respecting higher-timeframe zones and providing lower-timeframe confirmation through imbalances and divergences, it offered a clear setup with high reward potential.
For traders using smart money concepts, this was a textbook example: from liquidity grab to divergence to FVG fill, the market played out with surgical precision. As EUR/USD continues to react to macro drivers and dollar flows, more such opportunities could be on the horizon.
Saad Ullah
