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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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EURUSD bulls are once again pressuring the 1.1430 resistance level. We reviewed this area on Sunday where I noted that I was suspicious of last Friday’s selloff.
It was the bullishness of Thursday’s bounce from 1.1300 support that caused me to doubt Friday’s bearish rejection candle. Of course, the fact that the bearish signal came on a Friday when volume tends to be lower didn’t help matters.
So far, euro bulls are continuing today where they left off yesterday. But despite the recent pressure on 1.1430, sellers are holding firm, at least at the moment.
You may have noticed the hesitation from market participants so far this week. That’s largely due to the U.S. midterm elections which are taking place as I type this with results expected out later this evening starting at around 6 pm EST.
Most traders won’t want to commit one way or the other until those results are final. So while EURUSD is pressuring the confluence of resistance at 1.1430, I don’t expect much movement here or elsewhere until later this week.
The price action at 1.1430 is a stalemate at the moment. On the one hand, buyers look ready to break the confluence of resistance in the area. And on the other hand, the momentum since April remains mostly bearish.
Should sellers carve a bearish pin bar below 1.1430 over the next day or two, I will consider a short entry. A rejection from 1.1430 would take the euro back to 1.1300 with a break there exposing 1.1130.
On the flip side, a daily close (using a New York close chart) above the 1.1430 area would turn our attention back to 1.1530 resistance. A break above 1.1430 would also suggest the market intends to keep the larger 500 pip range intact a while longer.
Be careful about entering ahead of the U.S. midterm elections results though. While it won’t trigger the kind of volatility we witnessed in November 2016, a “surprise” result could shake things up quite a bit for a pair like EURUSD.
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