The EURUSD is coming off the top of a descending channel I’ve mentioned several times, including the December 30th commentary.
The pair’s failure to close the day above that 1.1200 area on the 31st meant that a pullback was likely.
Sure enough, the euro is off its recent high by nearly 70 pips and is also retesting the 1.1175 region.
Notice how 1.1175 held the EURUSD back between October and December.
Will it hold as support?
That’s anyone’s guess. As always, it’s going to come down to today’s closing price at 5 pm EST.
If the EURUSD can stay above 1.1175 on a daily closing basis, the area will remain intact as support.
However, a daily close below 1.1175 would hint at a deeper pullback from the euro.
A close below 1.1175 would also expose the confluence of support at 1.1075.
So it seems the EURUSD remains indecisive even with a new year upon us.
But that won’t last forever.
At some point, the pair will be forced to make a decision.
Either break above the descending channel resistance near 1.1200 to offer a long opportunity or close below the 1.1075 support area to attract shorts.
I think the EURUSD is getting close to breaking out, but we aren’t there yet.