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Over the weekend we discussed how the EURUSD would likely find selling pressure at 1.2325. As the low of the 2008 financial crisis, it makes sense that offers would build up here.
As it turns out, Wednesday’s session carved a high of 1.2323, just two pips below our key level. Not only did the pair find sellers in the area, but it also erased all gains for the week.
Additionally, Wednesday closed back inside the ascending channel that extends from the November 2017 low. Although the EURUSD didn’t react to this upper boundary last week, the pair did find support here before breaking below it on Wednesday.
With prices now back below the level on a daily closing basis, all eyes turn to 1.2145 followed by 1.2070. A close below that would open up the confluence of support at 1.1930.
I suspect sellers will want to defend the 1.2200 area going forward. It’s going to take a daily close (New York 5 pm EST) back above it to re-establish last week’s rally.
In summary, the longer-term uptrend is intact, but Wednesday’s close suggests near-term weakness in the single currency.
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