EURUSD - Buy Zone Reaction

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Corrective Recovery From Buy Zone Liquidity Toward Strong Liquidity

Fundamental Analysis

EURUSD is trading in a sensitive short-term macro environment as traders continue to monitor U.S. dollar momentum, Fed expectations, and upcoming economic data from both the U.S. and Eurozone.

After a sharp bearish displacement, the pair is now reacting from a lower liquidity area. This does not confirm a full bullish reversal yet, but the chart suggests that EURUSD may attempt a corrective recovery before the next larger directional decision. As long as the lower buy zone holds, buyers may try to rebalance price toward the FVG and liquidity zones above.

Technical Analysis

On the 1H chart, EURUSD recently made a strong bearish move below the previous support structure around 1.1595 - 1.1600. This breakdown created a clear imbalance and pushed price into the lower buy zone liquidity area.

The current reaction is forming around 1.1537, after price tested the lower demand/liquidity zone near 1.1510 - 1.1520. This area is marked as the Buy Zone Liquidity + FVG on the chart, and it is the key zone buyers need to defend.

Although price is still below the EMA 34, EMA 89, and EMA 200, the current structure shows a possible corrective recovery setup. The EMA lines are still acting as dynamic resistance, so the recovery must be confirmed step by step rather than assumed too early.

The first important upside area is around 1.1567, where the EMA reaction zone is located. If price reclaims this level, EURUSD may continue toward the previous strong support area around 1.1595 - 1.1600. Above that, the stronger liquidity zone sits around 1.1613 - 1.1616, which is the main upside target shown on the chart.

From an ICT perspective, the market has already created a sharp displacement lower, leaving imbalance above price. A recovery into the FVG and strong liquidity zone would be a normal rebalancing move after a liquidity sweep. However, if price fails to hold the lower buy zone, the recovery scenario becomes weaker.

Important Key Levels

Current price area: 1.1537
Buy Zone Liquidity + FVG: 1.1510 - 1.1520
Invalidation below: 1.1509
First recovery level: 1.1541 - 1.1550
EMA reaction zone: 1.1567
Strong support retest: 1.1595 - 1.1600
Strong liquidity target: 1.1613 - 1.1616
Upper resistance area: 1.1640 - 1.1660

Trading Scenario

Main Buy Scenario

Entry: 1.1515 - 1.1520
Stop Loss: 1.1505
Take Profit 1: 1.1541
Take Profit 2: 1.1567
Take Profit 3: 1.1595 - 1.1600
Take Profit 4: 1.1613 - 1.1616

Buy Condition

The preferred setup is to wait for EURUSD to hold the 1.1510 - 1.1520 Buy Zone Liquidity + FVG area.

A buy setup becomes more valid if price forms bullish rejection from this zone, such as a long lower wick, bullish engulfing candle, bullish displacement, or a clean reclaim above 1.1541.

If price breaks and holds above 1.1567, the corrective recovery scenario becomes stronger. In that case, the next upside targets are 1.1595 - 1.1600 and 1.1613 - 1.1616.

This is a corrective buy setup, not a confirmed long-term bullish reversal. EURUSD still needs to reclaim the EMA structure and strong liquidity zone before buyers can confirm stronger control.

Alternative Sell Scenario

Entry: 1.1595 - 1.1616
Stop Loss: 1.1640
Take Profit 1: 1.1567
Take Profit 2: 1.1541
Take Profit 3: 1.1515

Sell Condition

If EURUSD recovers into the 1.1595 - 1.1616 resistance and liquidity zone but fails to hold above it, sellers may react again.

A sell setup becomes more valid if price forms bearish rejection, a failed breakout, long upper wick, or bearish engulfing candle from the strong liquidity area.

If price rejects from this zone and breaks back below 1.1567, the market may return toward 1.1541 and the lower buy zone around 1.1515.

Entry Conditions

Do not buy only because price is inside the buy zone.
Wait for bullish confirmation from 1.1510 - 1.1520.
A reclaim above 1.1541 would be the first sign of recovery.
A break above 1.1567 would strengthen the move toward 1.1595 - 1.1616.
If price breaks and holds below 1.1505, the buy setup should be invalidated.
Risk management is essential because EURUSD can sweep liquidity before creating the real move.

Overall, the current view is that EURUSD may continue a corrective recovery from the Buy Zone Liquidity + FVG area toward 1.1567, then 1.1595 - 1.1600, and potentially 1.1613 - 1.1616 if buyers maintain control.

Do you share the same view that EURUSD may recover into strong liquidity first, or are you waiting for confirmation above 1.1567?

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