EURUSD Trade Recap – ICT Smart Money Concepts Bearish Setup | July 7, 2025

Pair: EUR/USD
Style: ICT London Continuation Model
Date: Monday, July 7, 2025
Session: London

Overview

On Monday, July 7, 2025, a textbook ICT Smart Money Concepts setup formed on EURUSD during the London session. By aligning higher timeframe liquidity levels, watching price delivery on the Dollar Index (DXY), and identifying a reversal after a liquidity sweep, we were able to confidently execute a bearish trade on EURUSD with high probability.

Building the Bias – DXY vs. EURUSD

The key to any ICT-based trade setup is forming a clear directional bias based on higher timeframes.

• Bullish Bias on DXY:
  Price was approaching the previous week’s high—a known liquidity pool. I expected the dollar to reach this level, which would naturally put pressure on EURUSD to decline.

• Bearish Bias on EURUSD:
  EURUSD had taken out the previous day’s high during Monday’s Asian/London session but failed to hold above it. Simultaneously, DXY never took out its previous day’s low, and instead started printing bullish structure. These inverse reactions helped confirm the idea that EURUSD was primed for a reversal to the downside.

4-Hour Candle Structure Confirmation

With my bias forming, I focused on the 4-hour charts:

• DXY (Dollar Index):
  A strong 4H bullish candle close confirmed the dollar's momentum. The next candle was expected to open with a small dip (retracement) and then expand upward—typical of ICT continuation behavior.

• EURUSD:
  Conversely, EURUSD closed with a bearish 4H candle, indicating weakness and the potential to follow through with a sell-side move.

The Setup – London Session Execution

As we approached the London Kill Zone, the structure became even clearer:

• Stop Hunt Confirmed:
  EURUSD had swept the previous day’s high, fulfilling a classic liquidity grab and setting the tone for a smart money reversal.

• Re-entry into Weekly Opening Gap:
  Just before the London Kill Zone, price traded back into the New Weekly Opening Gap and printed a 15-minute bearish candle closure—a key signal for a potential entry.

Entry Strategy & Execution

Given the confluence of:

• DXY strength

• Market structure shifts

• Liquidity sweep on EURUSD

• Weekly gap re-test

…I executed a short entry on EURUSD at the 15-minute bearish candle close, aligning with the Smart Money Concepts taught in the ICT model.

💡 Note: More conservative traders could wait for a displacement, then enter on a retracement into a newly formed 15M fair value gap (FVG) for added confirmation.

Stop Loss & Target

• Stop Loss: Placed above the recent 15-minute swing high, above the entry FVG.

• Target: The previous week’s low on EURUSD.
  (You can scale out or manage risk with partials along the way depending on your personal risk model.)

This trade offered great risk-to-reward, especially when anticipating a sharp move due to a higher timeframe PD array (premium draw) being targeted.

Why This Trade Worked

• Liquidity Sweep: Previous day’s high was taken out → signal of engineered liquidity.

• Market Structure: Confirmed bearish with clean breaks on 15M and 1H.

• Time of Day: Execution aligned with London Kill Zone—high probability window.

• Higher Timeframe Confluence: Weekly objectives and 4H momentum supported the narrative.

Key Takeaways

📌 Market Structure First:
Watching 4H closures gave early confirmation of directional bias.

📌 Liquidity Reversals Work:
The sweep of Monday’s high and immediate rejection was a clean signal.

📌 Kill Zone Timing is Everything:
Executing in the London session gave precision and clarity.

📌 Confluence = Confidence:
The alignment of DXY bullishness and EURUSD technical rejection added probability.

Learn More About the ICT London Continuation Model

If you’re new to ICT or want to understand how these concepts work in real time, click here to learn more about how to trade the London continuation model, FVGs, and order blocks effectively.

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