My interest in EURUSD has increased tenfold in recent weeks.
Not because the pair is producing quality setups.
Far from it, in fact.
No, I’m more interested now because the year-to-date price action is signaling that something more significant than a 200-pip range is in the works.
I first pointed out a possible falling wedge here on March 5th.
That pattern could be the start of something more significant from euro bulls.
It’s difficult to imagine, I know, but crazier things have happened.
Much of my sentiment and criteria for a bullish move remain the same.
To keep things simple, EURUSD buyers need to secure a daily close (using a New York close chart) above wedge resistance at 1.1360.
Until that occurs, the single currency will remain under pressure.
I wrote about this very same idea last Sunday.
But I wanted to take a few minutes of your time to point out what has happened so far this week.
We know EURUSD tested resistance at 1.1350/60. I wrote about it on Monday.
But after two 24-hour sessions this week, I can say definitively that this retest is different from the previous three retests earlier this year.
Notice how the last three times EURUSD tested this resistance level, the pair sold off quite aggressively.
And how about this time?
We haven’t seen the same intensity from euro bears; not even close.
If offers below this resistance level are indeed drying up, it could be indicative of an imminent upside break.
However, that does not mean the pair will breakout.
There are too many unanswered questions to make such a bold statement, not to mention the fact that I never use absolutes in my writing.
We also have a Wednesday Fed rate decision and statement at 2 pm EST followed by a presser 30 minutes later.
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.
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