Timeframe analyzed: Daily
Current context: Post-rally corrective phase within a broader bullish structure

Market Context

EURUSD has completed a strong impulsive leg to the upside, followed by a distribution-to-correction phase after failing to sustain prices above the recent highs near the 1.19 area. The current decline should be interpreted as a corrective move rather than a full trend reversal, unless key higher-timeframe supports fail decisively.

From a structural standpoint, price remains above the major bullish breakout level, maintaining a higher-timeframe bullish bias.

Wyckoff Interpretation (Volume & Structure)

According to Wyckoff methodology, the recent price behavior suggests:

• The prior rally represents a markup phase
• The range near the highs shows signs of distribution / preliminary supply
• The ongoing decline fits a reactive phase (secondary test / backup) rather than markdown

Volume characteristics support this view:

• Selling pressure has increased, but without climactic volume
• Down candles show effort without strong downside continuation
• This behavior is typical of a pullback designed to test demand

This implies that strong hands may be absorbing supply on the retracement, preparing for a continuation of the broader bullish trend.

Key Technical Level: 1.120 Area

The 1.120 zone stands out as a critical confluence level:

• Previous major resistance, now acting as support
• High-volume node and former acceptance area
• Likely location of demand re-entry and stop accumulation
• Aligns with a healthy Fibonacci retracement of the prior impulse

From a market mechanics perspective, this level is ideal for:

• Liquidity inducement
• Demand confirmation
• Reaccumulation

A controlled pullback into 1.120, especially if accompanied by decreasing downside momentum and stabilizing volume, would strongly favor a bullish continuation scenario.

EURUSD DAILY

Hypothesis 1 – Primary Scenario (Preferred)

Price retraces toward the 1.120 zone, where:

• Selling pressure weakens
• Volume shifts from distribution to absorption
• Price forms a base or higher low on lower timeframes

If demand confirms at this level, EURUSD is likely to:

• Resume the bullish structure
• Target a re-test of the recent highs
• Potentially extend further into continuation territory

This scenario remains valid as long as 1.120 holds on a daily closing basis.

Invalidation

The bullish hypothesis would be weakened if:

• Price breaks decisively below 1.120
• Volume expands aggressively on the downside
• Structure shifts to clear lower lows and lower highs on the daily timeframe

In that case, the move would transition from a corrective phase into a broader markdown.

Conclusion

EURUSD is currently undergoing a technically healthy pullback after a strong bullish leg. From a Wyckoff perspective, the market appears to be searching for demand confirmation, not initiating a full reversal. The 1.120 support zone is the key area to monitor for signs of reaccumulation and bullish continuation in the coming week.