Peter Smith
The euro is bouncing back against the dollar after hitting liquidity zones around 1.1610. Traders are watching for a possible trend shift, but confirmation above 1.1632 is needed before bulls can take control and push toward 1.1778.
Market Analysis
After days of decline, EUR/USD dipped below 1.1620, clearing out stop-losses in what's called a liquidity sweep. The quick bounce suggests big players grabbed liquidity at lower levels and might be positioning for a move up. Analyst 𝐋𝐞𝐦𝐚𝐲𝐢𝐚𝐧 noted that closing above 1.1632 would validate the order block—basically a zone where institutions showed buying interest.
The chart shows a potential scenario: price could pull back slightly to retest the order block, then push strongly upward. This pattern is common when smart money accumulates positions after sweeping liquidity. If confirmed, we could see EUR/USD climb toward 1.1778, marked as the next major resistance.
The recent euro weakness came from dollar strength, backed by solid Treasury yields and the Fed's tough stance. But the dollar index is showing signs of exhaustion, which could give the euro some breathing room. Meanwhile, European economic data has improved a bit, and the ECB's cautiously optimistic tone might provide support if U.S. growth slows down.
A confirmed reversal from 1.1600 could signal a short-term mood shift, especially if upcoming U.S. inflation data or PMI numbers disappoint dollar bulls.
Bottom Line
Everyone's watching 1.1630–1.1632 right now. A clean close above this level would confirm the reversal and open the door to 1.1750–1.1780. Until that happens, EUR/USD could still drop back to test 1.1600 one more time before any serious rally begins.
Peter Smith
