The EURUSD and DXY are approaching massive tests ahead of Tuesday’s September close and Friday’s US non-farm payroll numbers.
See why 1.1780 is the area to watch in today’s video. I share key levels for the euro and US dollar, explain why they matter, and outline a straightforward trade plan.
The EURUSD isn’t wasting any time this week, bouncing from 1.1645 support.
It’s a level I shared with VIP members last week when the euro was breaking down from 1.1740. 1.1645 is significant as it’s a five-week composite point of control.
In other words, the EURUSD spent the most time at 1.1645 in August and early September.
As noted in the weekly forecast, markets remember levels like these.
However, euro bulls face a significant test after failing to hold the February trend line last week. Wednesday’s break below 1.1740 could be a primary driver for the EURUSD in October. But, as always, timing is key.
We’ve seen the euro tag the 1.1722 imbalance already this week, but 1.1780 remains open for business. I discuss both levels in last Friday’s video.
As long as the EURUSD remains below the 1.1800 region on the high time frames, I favor shorts from resistance.
The same applies to the DXY regarding 97.70. The US dollar secured a close above the level last week, which flips the 97.70 region to new support this week, with resistance at 98.60.
With that said, it’s important to note that the euro, like many major currency pairs, remains mostly sideways. So, although last week’s break of the February trend line could be significant, we’re still dealing with a ranging market.
That information is crucial when setting orders and trade expectations.
Expect more ranging between 1.1645 support and the 1.1730 resistance area, but don’t dismiss a wick into 1.1780 this week to clean up that buy-side imbalance from last Wednesday’s breakdown.
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