US100 H4 TF Analysis

Introduction:

The analysis focuses on the US100’s price action, utilizing concepts like liquidity zones, market structure shifts (MSS), and supply/demand areas. The chart integrates a systematic approach with key highlights such as:

1. Break of Structure (BSL): Highlighting liquidity above previous highs.
2. Market Structure Shift (MSS): Indicating a reversal or significant directional change.
3. Order Block (OB): A supply zone likely to act as resistance, where price could reverse after reaching it.

Description:

1. Supply Zone (Red Box):
   • Price is approaching a significant supply zone, marked in red. This area represents a previous order block (OB) and is a high-probability reversal zone.
   • Traders often anticipate selling pressure in such zones, especially when aligned with liquidity grabs above key highs.
2. Liquidity Grab Above BSL:
   • The chart suggests a liquidity sweep above the Buy Side Liquidity (BSL), where weak stops are taken out before a reversal.
   • Price has entered the supply zone and is showing signs of exhaustion, with a potential bearish rejection forming.
3. Trendline Liquidity (SSS):
   • A descending trendline (SSS) within the recent price action shows stacked liquidity.
   • If this liquidity is tapped, price could further confirm a reversal.
4. Expected Reversal Path:
   • The arrow indicates a likely scenario where price rejects from the supply zone, breaking back below critical support levels and potentially targeting the Sell Side Liquidity (SSL) or new lows.

Trade Setup Idea:

Entry:

• Wait for bearish confirmation (e.g., rejection candlestick patterns like engulfing or pin bars) within the red supply zone.

Stop Loss:

• Place the stop loss just above the supply zone (beyond recent highs) to account for liquidity spikes.

Target:

• First target: Previous structural low near 21,000 (Sell Side Liquidity).
• Extended target: Further downside continuation toward 20,700 or lower.

Risk Management:

• Use appropriate risk-reward ratios (e.g., 1:3 or 1:4), and ensure position sizing aligns with your risk tolerance.

Alternative Scenario:

• If price breaks above the supply zone with strong bullish momentum, the setup becomes invalid. Watch for a potential breakout and retest for a bullish continuation.

Conclusion:

This analysis provides a high-probability bearish setup based on the H4 US100 chart. Patience and confirmation are crucial for execution. Always combine this technical insight with broader market context and risk management principles.