The EURUSD looks to be gearing up for another run at 1.2275. The pair just closed below 4-hour wedge support after being rejected by the upper boundary yesterday.
All of this is occurring at a time when the single currency has been range-bound since mid-January, so finding an intraday wedge here makes sense.
As long as former support near 1.2355 holds as new resistance, the 1.2275 area remains exposed. A daily close below that would open the door for a move to the confluence of support at 1.2160.
I expect to see a considerable bid develop should the EURUSD reach the 1.2160 area. It’s the intersection of the January 18 and March 1 lows with trend line support from the April 2017 low.
However, I still maintain the idea that a close below the April 2017 trend line support or the 2008 trend line resistance is the much bigger play. Anything before that is just a warm-up.
For now, though, it’s about seeing former support at 1.2350/60 hold as new resistance. Key support comes in at 1.2275 followed by 1.2160.
Alternatively, a close back above former wedge support would re-expose resistance near 1.2400 followed by 1.2470.