Aside from the British pound, the majors are finding some reprieve today against the US dollar with the Euro leading the way. The single currency is off its session lows by a substantial 90 pips and is once again putting pressure on former wedge support near 1.1020.
Although the bulls have advanced the price well above this area, it’s important to keep in mind that this is an intraday rally. When using a higher time frame such as the daily, these rallies only serve to test the strength of a key level.
In other words, we don’t actively trade these intraday moves. Instead, we wait to see how it holds up on a daily closing basis. If the pair fails to hold above 1.1020 into the session close at 5 pm EST, we can begin watching for selling opportunities over the next couple of days.
Alternatively, if price holds above 1.1020 into the close, there’s a good chance that the area will act as support over the coming sessions. Such a move would also expose the confluence of resistance between 1.1122 and 1.1160.
Given my stance on the EURUSD and the weakness we saw in mid-October, I will only entertain selling opportunities going forward. Below 1.1020, the next level of support comes in at 1.0950 followed by 1.0820.
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