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EURUSD: 2019 Rally Underway?

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On Christmas Eve I discussed the potential for a EURUSD rally in 2019.

The falling wedge that began during the first half of 2018 suggests that sellers are running out of steam.

Many of you emailed me about a potential head and shoulders pattern on the weekly time frame.

However, I never thought it was one.

The neckline of a head and shoulders should either be horizontal or ascending. It should never be descending.

If it is, there’s a good chance it’s a falling wedge and not a head and shoulders.

That’s exactly what happened with EURUSD.

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What many thought was a neckline of a bearish pattern was actually the floor of a bullish falling wedge.

The EURUSD hasn’t quite broken free just yet, but buyers aren’t far away from doing so today.

I mentioned on Sunday that it was going to take a daily close above 1.1450 to confirm the breakout.

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With more than five hours to go, anything can happen. But all in all, EURUSD looks relatively bullish from where I’m sitting.

I know that goes against what many out there think about the euro, but that’s why I like the idea.

It also agrees with what’s happening to the U.S. Dollar Index (DXY).

This was a rare case where the index foreshadowed a EURUSD breakout.

On December 28th, the DXY broke down from a rising wedge pattern. It’s the inverse of the EURUSD which is what we’d expect.

I’ve been discussing the relationship between the two markets inside the member’s area for the last couple weeks.

I also shared my EURUSD long position at 1.1360 with members last week.

The goal is to add to the position following a daily close above the 1.1450 area. Until that happens, I will keep the position relatively small.

A close above 1.1450 would expose 1.1530 followed by 1.1620.

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EURUSD falling wedge on the daily time frame

About the Author Justin Bennett

Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...

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  • Michael MOTAU says:

    Thanks much Justin for enlightening analysis. Let’s see what the end of trading day gives us..

  • nadzuah says:

    thank you

  • Charles Harris says:

    My charts show 1.1463 is a strong S & R

    • Dave says:

      u re right bro, but its now broken which makes it a strong support now. in all justin is right about eurusd bullishness . the fundamentals about us govt now is not encouraging

  • Martin Ngulube says:

    I have learning so much from your analysis

  • Lance says:

    I have egg pips all over my face, head and shoulders. Kudos to Justin.

  • Ejiro says:

    My strong resistance is 1.1465.

  • Aniewo francis says:

    Hi Justin i wants to join your members, but i have ask several time. how will be know if i make payment. Please i need reply.

  • Paul says:

    Hi Justin, would it be wise to wait untill the resistance will be tested again?

    • Michael MOTAU says:

      I was asking myself the same question. Do I wait for retest or do I just buy?

    • That’s the type of content we discuss in the member’s area.

  • Colin de Ste Croix says:

    And indeed we have. (-:

  • Appiah says:

    EURUSD has tested 1.1450 and 1.14756 with a small pull back. If it breaks 1.14106 and 1.13136 then it will be going for short. Which can end at 1.1108

  • Davy says:

    Daily close means nothing for me,its al gambling for me Justin.You just have to get luckey.We reached 1.1485 we are back down to 1.1440,whats next up ore down?????

  • Tania says:

    Hi Justin, I have only just started going over your website and find it very interesting and helpful but in regards to reading this post on the EURUSD I would have thought the bias would be bearish, on the monthly chart it is in a very strong bearish channel and where price is currently at its been unable to close above resistance at 1.146 for a few days now which that level is also bearish resistance line taken from the highs at 1.248 Jan-Mar 2018 and 1.18 Sept 2018. I am waiting for a close below 1.12 area for a short where next major support is 1.05
    Your thoughts?
    Tania

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