EURUSD buyers are on the move again this week.
The pair bounced from Tuesday’s low of 1.0991, which is one pip above the 1.0990 level I’ve pointed out several times recently.
Be sure to watch Saturday’s Forex forecast video if you aren’t familiar with the 1.0990 horizontal level.
However, EURUSD bulls are fast approaching their first key test at 1.1070.
That’s going to be a tough level to get through if you ask me.
Notice how the 1.1070 area served as support for the EURUSD between July 31 and August 28 before breaking down on August 29.
It then began serving as resistance on September 5.
The euro has yet to close back above 1.1070 following the August 29 breakdown.
Whether or not buyers can get the job done is anyone’s guess.
I don’t know what will happen here; nobody does.
What I do know is that the bullish potential for the EURUSD is alive and well as long as the pair is above 1.0990 on a daily closing basis.
That doesn’t mean the pair will move higher, but I do think this rally has more upside potential, especially if 1.1070 falls.
A daily close above 1.1070 would expose the 1.1200 handle.
It could also trigger a retest of the broader descending channel top that I pointed out on September 6 when I said EURUSD had more room to move higher than lower.
So what would negate the bullish outlook?
A daily close back below 1.0990 or perhaps the descending channel top closer to 1.0970.
But as long as 1.0970/90 is intact as support, I favor a move higher from EURUSD.
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