EURUSD faces a critical test this week ahead of key event risk starting Wednesday.
Watch today’s video for this week’s EURUSD trade idea, plus get the latest on the US Dollar Index (DXY).
The EURUSD is off to a slow start this week following last week’s selloff.
As discussed over the weekend, the euro is in a tough spot after losing the 1.1000 level last week.
The pair even closed below the June trend line, making the area between 1.0985 and 1.1000 key resistance for EURUSD this week.
A sustained break above 1.1000 would turn the EURUSD bullish, opening the door to levels like 1.1110.
However, bulls have their work cut out for them to reclaim that region as support.
On the DXY side, the index remains below 102.60 resistance, as noted in the latest Weekly Forex Forecast.
I’m not in favor of longing the US dollar while the DXY is under that mark.
If the index can reclaim 102.60 this week, I’ll flip from neutral to bullish on the US dollar, targeting levels like 104.00.
Until then, I remain mostly neutral on both the DXY and pairs like EURUSD until we see a resolution to last week’s price action.
Although it’s been a slow start, Wednesday’s FOMC minutes, Thursday’s US CPI, and Friday’s US PPI figures are likely to shake things up for EURUSD.