EURUSD Analysis – Sellers Dragged the Market Into an Oversold Region
EURUSD sellers dragged the market into an oversold region towards the 0.9610 demand zone. The EURUSD sellers have been in control of the market for quite a while. On the daily chart, the market resumed its declination fate after the price retested the bullish reclaimed order block formed on the 27th of January, 2022. With the Simple Moving Average (SMA) indicator steeply heading downward, it reveals the intent of the market participants to keep crashing the market.
EURUSD Significant Zones
Demand Zones: 0.9860, 0.9610
Supply Zones: 1.0360, 1.0810
On the daily timeframe, the market’s bearishness could be traced down to the end of the year’s first quarter when the price bounced off the reclaimed order block and broke the previous support at 1.0810. The price kept on crashing downward after breaking the previous support until the EURUSD took partial profits around the 1.0360 price level. The partial profits taken led prices upward into another bullish reclaimed order block about the previous support at 1.0810. This order block was used as a re-entry for the EURUSD sellers as they stormed the market again with their sell orders.
The price level used as partial TP by the EURUSD sellers on the 13th of May, 2022, was used again to take the unfilled buy orders a few days later. During the second retest at this price level, a bearish flag was formed. The bearish flag signalled a continuation of the market’s trend to the downside. The market eventually resumed its downtrend as all the bulls were aggressively squeezed out. On the 11th of August, 2022, the market resumed its downtrend while leaving a propulsion block that aggressively broke the market structure downward. The propulsion block was later used for re-entry on the 13th of September, 2022, to create a massive runaway price to the downside.
After the massive runaway in price caused by the EURUSD sellers on the 13th of September, the price kept heading into an oversold region. On the four-hour chart, the market resumed its downtrend on the 13th of September after clearing the double top and balancing the inefficiency caused by the massive downward movement. The market is expected to rally for a while into the premium (anywhere above the 50% retracement level) before crashing down further.
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