The decision to short the EUR/USD currency pair is grounded in a combination of technical analysis and order flow dynamics, suggesting a potential bearish move.
1. Asian Consolidation Low Break: The trade strategy involves capitalizing on the break of the low point during the Asian consolidation phase. This breakout may signify a shift in market sentiment, with sellers gaining control.
2. Asian Range High Liquidity Sweep: Examination of the Asian session reveals a liquidity sweep at the high point of the range. A liquidity sweep indicates a surge in trading activity, leading to a temporary supply-demand imbalance. Such events can act as a precursor to a reversal or a continuation of the existing trend. In this case, it aligns with the bearish sentiment.
3. 1-Minute Structure Break for Entry: On the 1-minute chart, there's a noticeable break in market structure, likely indicating a change in the short-term trend. This serves as a potential entry signal for the short trade.
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