Yesterday I commented on how EURUSD buyers weren’t backing down.
The level in question was falling wedge resistance from the March 2018 high.
I’ve commented on this wedge several times in recent weeks including the 12th and 15th of March.
I even warned EURUSD shorts on March 5th.
If you read through those commentaries, it becomes quite clear that I’ve been neutral EURUSD with a slightly bullish tilt.
That’s due to the direction of this wedge.
Because it’s a falling or descending pattern, it has bullish implications.
And in case you weren’t sure about my bias here, I even wrote that EURUSD may be about to break free 24 hours ago before Wednesday’s FOMC.
Here’s what I wrote:
I’m reasonably confident those events will give us the answers to our questions, and that the future direction of the euro will be clear by this time tomorrow.
All that said, if this week’s price action is any indication, the EURUSD may be about to break free from a twelve-month resistance level at 1.1360.
The “those events” in the quote above referred to Wednesday’s Fed rate decision and statement.
And break free it has.
The daily chart below says it all. With the EURUSD now firmly above twelve-month resistance, the bullish narrative is alive and well.
You may notice that I’ve cleaned up my chart quite a bit to only include the key resistance levels on the way up.
Feel free to revisit older posts for additional levels.
As for immediate support, I think there’s a reason to believe EURUSD will catch a bid in the 1.1400 region; perhaps just below it at 1.1390.
And as long as bulls follow through on Wednesday’s breakout, the first key resistance doesn’t come in until 1.1540.
But keep in mind that 1.1540 may only serve as temporary resistance.
A daily close above it could take the EURUSD all the way to the September 2018 high at 1.1815.
On the flip side, the pair would need to close below former wedge resistance (new support) near 1.1320 to negate the bullish outlook.
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