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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
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After just ten trading days, the EURUSD is back to testing the “must hold” support level I mentioned on April 6. In fact, it’s already dropping below the level on an intraday basis.
What’s interesting about the last ten days is that buyers failed to challenge the 2008 trend line. You can see how the level has come under severe pressure beginning on January 25.
The fact that Euro bulls weren’t able to retest the 1.2440 area this time around could be a significant development. It may suggest that sellers are starting to regain some control here.
Of course, only time will tell. More specifically, today’s close at 5 pm EST (remember, I use New York close charts) will tell the story.
If the EURUSD closes the day below 1.2300, we’ll be staring at a break of a twelve-month trend line. It would also open the door to the next key support at 1.2160 with a close below that exposing the 1.2090 handle.
Alternatively, a daily close back above 1.2300 would keep the multi-month wedge pattern intact. It would also re-expose the 2008 trend line near 1.2440.
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