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Just yesterday I wrote about two ways to short the EURUSD.
The first was to watch for a retest of the 1.1190 resistance area.
Clearly, we didn’t get that today.
The second option was to wait for a daily close below the (former) multi-year support at 1.1110.
My base case was for a break of that level regardless of whether we got a retest of 1.1190 or not.
It seems Wednesday’s Fed rate decision gave us what we were after.
As I write this, the euro just closed below 1.1110 by 35 pips.
It’s an area that has supported EURUSD since late April. And as we know, old support becomes new resistance.
As such, I will be watching for a selling opportunity following a retest of the 1.1110 level as new resistance.
Ideally, we get some bearish price action there such as a pin bar.
But I’m not opposed to shorting the pair at 1.1110 without said price action. I will, however, keep any position small until we get confirmation.
As I wrote yesterday, the next key support comes in at 1.0860.
Only a daily close back above 1.1110 would negate my bearish outlook.
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