Will EURUSD and DXY finally break their August ranges? Or will Monday’s price action become yet another failed attempt?
Get the details in today’s video, including key levels to watch and potential targets for September.
EURUSD is breaking out on Monday after trading sideways since early August.
As noted in recent videos, the euro had to decide in early September. The intersection of the February and July trend lines would force the EURUSD out of its comfort zone this month.
We’ve seen breakout attempts fail in recent weeks, so traders should be cautious. However, we’ve yet to see EURUSD close a day above or below the 1.1580 to 1.1720 range.
If Monday closes above 1.1720, the area will flip to new support on Tuesday. As always, any breakout can fail, so don’t assume it’s a sure thing.
A sustained break above 1.1720 will expose the 1.1790 resistance level. There is also a poor high, or unfinished auction, at 1.1810 from July 3rd, which could serve as a target for the euro.
On the other hand, a close above 1.1720, followed by an immediate close back below would confirm a fakeout. That would re-expose the February trend line near 1.1670.
Another consideration for traders is the ascending channel from 2022. If you draw a parallel ascending channel connecting the 2022 and 2025 lows with the 2023 high, you get a pattern that intersects with the July 1st high.
This channel attracted sellers in early July, triggering a 430-pip selloff from EURUSD.
The top of this channel is one to watch if EURUSD breaks higher this week. It’s difficult to tell where this ascending level might play a role, but somewhere near 1.1900 is my best guess.
As for the DXY, 97.70 continues to attract buyers. The dollar index held above it on Friday, so we’ll see if dollar bears can finally get the job done.
A sustained break below 97.70 will expose the 96.70 region. That’s the 2011 channel support. Alternatively, a close above 97.70 on Monday will keep the 97.70-98.60 range intact for one more day.
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