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On Monday I wrote about a key resistance area for EURUSD.
The 1.1290 region is part of the March 2018 trend line. We’ve discussed this level several times over the last couple of months.
Even though the pair cleared this resistance level for a few days in March, I figured it would still play a role here.
Today’s session is validating my theory.
After reaching a high of 1.1287 earlier today, the EURUSD sold off aggressively and is currently trading 40 pips below our resistance area at 1.1290.
If it stays this way, we’ll have a bearish engulfing candle from resistance on our hands. As always, it all depends on where EURUSD closes today at 5 pm EST.
I use New-York-close Forex charts so that each 24-hour session closes at 5 pm EST.
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That should be enough to keep the downtrend intact for a while longer.
Just keep in mind that key support isn’t far away at 1.1180/90.
You can see how EURUSD found support here in March and again earlier this month.
It’s going to be essential for sellers to clear that 1.1180/90 area on a daily closing basis. That’s the only way they’ll be able to open up downside targets.
One of those targets includes the November 2017 trend line.
That level connects with the lows from August and November 2018.
If EURUSD bears can clear 1.1180/90 support to expose that trend line, it could mean a 1.1060 print over the next few weeks.
Alternatively, a daily close above the March 2018 trend line near 1.1280 would negate the bearish outlook.
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.Read more...
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