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EURUSD Approaches Confluence of Resistance at 1.1450

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In the last weekly forecast, I mentioned how I was cautiously bullish the EURUSD as long as price remained above the 1.1100 area. I also stated that a close above 1.1250/85 would expose the next key resistance level at 1.1390.

But perhaps a more important observation in that commentary was the confluence of resistance near 1.1430. To be clear, the area actually lies between 1.1430 and 1.1450.

The weekly chart below shows the significance of this area.

EURUSD, weekly chart

As of this writing, the pair is 20 pips off its session high of 1.1434. Note that this price is right between the two levels I just mentioned.

Now, considering the bullish momentum of late and fresh 2017 highs this week, I’m by no means bearish here, and I’m certainly not going to entertain a short right now. But the resistance area in the chart above is one to keep an eye on as this rally progresses.

An interesting observation here is that the two highs that formed this trend line (August 24, 2015, and May 3, 2016) were met immediately by sellers. In fact, both occasions triggered a selloff of more than 500 pips within a matter of weeks.

I’ll remain a spectator for now, but the EURUSD will be one to watch as bulls confront of the confluence of resistance at 1.1430/50. A daily close above it would set the stage for a continuation of the 2017 rally.

Alternatively, a bearish signal from this area could offer an attractive opportunity to get short. Although that idea may seem counter trend, the truth is that the single currency has been range-bound since early 2015. Look no further than the weekly chart above.

We’ll have to wait and see if this time is different for buyers or if they’re walking into another trap. Next Wednesday’s FOMC meeting minutes and Friday’s non-farm payroll will be key factors in determining the likely path forward.

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EURUSD daily chart

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8 comments
Dimitris Tzaninis says

Thanks

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Suwanto says

it is a very interesting view so far for me, I will follow this situation in order to increase my knowledge. thanks alot Justin.

Reply
    Justin Bennett says

    You’re welcome. Glad to hear you found the post helpful.

    Reply
Ogo Norahs says

Nice one Bernett. Thanks for your analysis. It’s well appreciated

Reply
    Justin Bennett says

    Thanks and you’re very welcome.

    Reply
tom gasket says

another subject,I recently read your comments on using a new york close for charting,you mentioned FXCM,are they still in business?thanks for all your insights TJG

Reply
    Justin Bennett says

    Tom, send me an email, and I’ll be happy to share who I use.

    Reply
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