EUR/USD Analysis: Supply Zone Rejection Confirms Bearish Momentum

Sometimes the market gives you perfect setups—and this week’s EUR/USD move was one of them. When price revisits untested supply zones where institutional orders sit waiting, sharp reactions often follow. That’s exactly what happened as EUR/USD pushed into the 1.1620–1.1650 area, swept liquidity, then reversed hard.

How the Trade Unfolded

According to Kodak’s breakdown, the setup played out in three clear steps:

• Step 1 – Entry into Supply Zone: Price entered the untested 1.1620–1.1650 supply area, where early short entries were placed based on liquidity theory.
• Step 2 – Liquidity Sweep & Pullback: The market swept above the zone to trap late buyers, then pulled back to the last strong bearish candle—the key decision point for confirmation.
• Step 3 – Breakdown Confirmed: Price failed to hold above the supply region, broke below 1.1580, and formed a lower low—signaling that sellers were firmly in control.

This type of pattern—supply rejection, liquidity sweep, and structural shift—is a hallmark of smart money behavior in forex markets.

What It Means

Untested supply zones are areas where the market hasn’t balanced its books yet. When price returns, it often triggers sharp moves as trapped buyers become fuel for institutional shorts. In this case, EUR/USD’s rejection lines up perfectly with that logic: price grabbed liquidity at the top, absorbed early exits, then continued lower once the pullback failed.

With the breakdown confirmed below 1.1600, bears remain in charge. Next support levels to watch are around 1.1530 and 1.1475. Unless EUR/USD closes decisively above 1.1620, any bounce is likely to meet fresh selling pressure. The lower highs and lower lows tell the story—momentum is still pointing down.