Peter Smith
The EUR/USD pair recently delivered a textbook liquidity-driven rally, pushing through key resistance after sweeping sell-side liquidity zones. This move reflects both technical precision and shifting macro sentiment around the U.S. dollar.
Key Technical Events
Trading educator The Inner Circle Trader highlighted how the price action perfectly followed institutional flow patterns, offering a clear example of how liquidity principles drive forex markets. The chart revealed several important developments: Price swept into a liquidity pocket during the New York Open kill zone, triggering stops before reversing sharply upward. A breakaway gap near 1.1570 signaled strong buying interest, while the pair broke through the jagged resistance zone that had capped earlier rallies. Fibonacci retracement levels, particularly the 0.5 mark at 1.1606, provided a solid base for the next leg higher, confirming the bullish structure.
What's Driving the Rally
The move was supported by weaker U.S. dollar sentiment as economic data showed signs of cooling, which pressured the greenback and lifted the euro. Technical momentum from liquidity grabs and gap fills pulled fresh buyers into the market, while expectations of a more cautious Federal Reserve added to the supportive backdrop for EUR/USD.
Looking ahead, immediate support is likely around 1.1600–1.1610, with bulls targeting the 1.1640–1.1650 zone as the next resistance. However, upcoming U.S. inflation data and ECB commentary could introduce volatility and shift the near-term dynamics.
Peter Smith
