This Lab Note was first shared yesterday inside the Premium Lab.
It’s been spot-on (EUR/USD hit the exact target), and since the insight holds value for today’s session as well, I’m making it available to Free readers too.
Let’s dive in and see why this EURUSD setup made the cut.
Market Context
The U.S. dollar continues to hover under pressure after failing to neutralize the island reversal setup discussed in Lab Note #25, leaving the door cracked for risk-on trades. EURUSD bulls seized the opportunity, pushing the pair into a high-stakes battle zone right at the intersection of multiple technical pressure points.
EURUSD H4 - Where the Game Is Played Now
The red downtrend line (highlighted in Lab Note #5) once again proved to be more than just a memory acting as solid support and rejecting sellers twice near the lower edge of the orange consolidation range.
As anticipated back then: “If bulls defend that red line again, we might see another march toward 1.1650 zone.” - that's exactly what unfolded. Bulls gathered strength and successfully hit the upside target.
From there, momentum took EURUSD up to retest the upper border of the purple rising channel, but sellers quickly reappeared near mid-November highs, prompting a temporary pullback.
However, the bulls weren’t done. A third attack on the 1.1650 zone finally broke through, catapulting price into a new resistance zone created by:
- the upper edge of the purple rising channel
- the upper edge of the green ascending channel
- the 50% Fibonacci retracement of the entire September - November downtrend
That’s where we are now. And that’s where the next battle will be decided.
Bearish Scenario:
Technical indicators aren’t exactly flashing green, and CCI and Stochastics are deep in overbought territory. Additionally, a negative divergence on Stochastic suggests momentum may be fading even as price climbs.
If price is rejected from current resistance, look for a move back to 1.1650 zone (which serves now as a support).
A failure to hold that support could bring 1.1600-1.1580 and the lower edge of the purple channel back into play.
Bullish Scenario:
But the bulls aren’t out of cards… a daily close above the current resistance area (especially above the pro-bearish gap from Oct. 20: 1.1658-1.1670) would mark a breakout worth respecting.
In this case, the first upside target: 1.1730 (October swing high + top of bearish gap from Oct. 6)
Close above that level? The next target is the 61.8% Fibonacci retracement and the zone around 1.1737-1.1750
My takeaway: EURUSD is at a decision point, and today’s close is critical. If bulls can close above the pro-bearish gap, they gain serious momentum to retest higher zones. However, if they fail… expect another round of corrective pressure.
If you followed the plan laid out in Lab Note #5 and took that red-line breakout play - congratulations. That setup paid. We don’t chase hype here. We spot high-probability trades before they light up everyone else’s screen. Stay sharp.
P.S. Please keep in mind that this week only, you can unlock full Premium access for just $9 (instead of $99) - no strings attached. Because the real magic is just getting started: U.S. indices, FX setups, oil, and the deeper mechanics.
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Anna
Trading Lab Founder