Markets don’t break multi-year trend lines without some volatility.
In the case of the EURUSD, the pair is trading just above a twenty-year trend line that extends from the euro’s all-time low at 0.8225.
And if you use pricing data from the basket of pre-euro currencies, the trend line dates back to 1985.
As I’ve discussed for the last few weeks, that support area lies somewhere between 1.0700 and 1.0750.
I mentioned that region in last Saturday’s forecast video.
It’s no surprise then to see buyers step in while the EURUSD is trading above 1.0700.
We’ve seen buying pressure materialize over the last three trading days.
However, Tuesday’s 80 pip intraday rally presented us with a unique selling opportunity.
When the EURUSD was trading at 1.0880, I told Daily Price Action members that it’s where I would sell the pair if I weren’t already short.
Those who shorted the EURUSD around 1.0880 are already in profit by roughly 60 pips.
But despite things going our way, it’s important to stay defensive and not get overly bearish the euro.
Furthermore, as I’ve stated recently, it’s most likely going to take a monthly close below the multi-year level near 1.0700 to confirm the breakdown.
You can’t play a twenty-year breakout on the 4-hour or even daily time frame.
With that in mind, this Thursday marks the April close, so expect the elevated volatility to continue as market participants jockey for position.
I remain short from the 1.0980 area based on my April 14th commentary.
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