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EURUSD Breakdown Sets Up Selling Opportunity

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Over the past 24 hours, the EURUSD has closed below trend line support and retested it as new resistance. We looked at this level a couple of times last week including during Thursday’s session.

Just hours into the start of the new week, the single currency surrendered the support level on a 4-hour closing basis. I mentioned the breakdown in the member’s area nearly 24 hours ago.

EURUSD post

The EURUSD then went on to test the 1.1875 area as new resistance (see chart below). It seems the pair is finally behaving after several days of indecisive price action.

As long as sellers maintain sub 1.1875 prices on a daily closing basis, I favor selling the Euro against the greenback.

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We can see how EURUSD bulls came out in support of the 1.1820 area earlier today. The region has been somewhat of a pivot for the pair since early August.

Keep in mind that the USDCHF descending channel I posted earlier in today’s session will be a key factor here. You can see a similar pattern on the Dollar Index (DXY).

If the USD can breach channel resistance on a daily closing basis at 5 pm EST, it will help validate a lower EURUSD. Those looking for further confirmation can wait for the U.S. dollar to clear resistance before pursuing a short here.

I don’t often use other markets in this manner, but it seems to make sense in this case.

For the single currency, the next key support comes in at 1.1670. Note that we could also see an influx of buying pressure at the November 21 low of 1.1712.

Below the 1.1670 handle, we have our original target from late October at 1.1490. The area served as a pivot in July and also capped advances in February, May, and October of 2015.

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EURUSD breakdown and retest

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.

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  • Levis says:

    Nice one Justine, i have been monitoring it for so long.

    • Justin Bennett says:

      Cheers, Levis. It has taken its time. Thanks for commenting.

      • David Ifeajika says:

        Weldone for the enrich trade highlight and information, have been following your trade update

      • Neo says:

        And here I bought it since I saw the buy signal on the 20day EMA 😂😂

      • Joel says:

        Me Justin thank very much, tho am new but following you here makes it easier with my demo, pls which broker can I see? I wanna boost my equity as a starter

  • Langa says:

    Thanks for the insight Justin, will keep an eye on this one!

  • Michael Moran says:

    I admire your work, and I read it occasionally. I like your levels of choice and your analysis. I’ve been a trader for over 35 years with the banks and now semi-retired.. trade my own SMSF account (small) and do consultancy work in Compliance and write a commentary for an online FX broker. If you ever visit Sydney, I’d be happy to meet and buy you a coffee and/or beer.

    • Hi Michael, thanks for the kind words and for commenting. I just might find myself in Sydney within the next year. We’ll have to exchange contact info if I make the trip. Cheers.

  • Chris says:

    hi Justin ,
    two trains of thought though im all eyes on what you project for a short.I can also see alot of support at price above 1.1800 which will possibly be a road block for any sellers. secondly if we look at the bull run from 21st of november the current price can possibly be a correction as its sitting on the .618 fibb so im suggesting buyers interest from here unless it breaks down lower today. Im sitting on the fence for now.

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