Daily Price Action
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EURUSD Breaks Confluence of Support on Intraday Basis

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As I write this, the EURUSD is breaking below the confluence of support at 1.1875. We’ve had this area on our radar for several weeks. It seems sellers are beginning to win their first battle of the year.

The ascending channel that extends from the mid-April lows has played a critical role in recent months. It attracted sellers in late August with the help of the 2012 low at 1.2040.

The lower boundary of the channel attracted a bid just last week following Wednesday’s Fed rate decision and statement.

One thing I pointed out a few weeks ago is that buyers have yet to give up a handle since late April. Every time the pair has closed a session above a key level, they haven’t given it back.

It is true that the single currency has dipped below support levels since April. We’ve even seen a few lower wicks pierce the 1.1875 area starting with the August 31st bullish rejection candle.

However, buyers have always lifted the price back above support before the New York close at 5 pm EST. This has been the case since the single currency claimed the 1.0860 handle on April 24th.

So if EURUSD bulls give up 1.1875 this week, it would be the first time that’s happened in six months. A daily close (5 pm EST) below 1.1875 would also expose the August lows near 1.1670. A break there would pave the way for a move toward the mid-July pivot at 1.1490.

As always, what happens on the intraday charts doesn’t mean much. Today’s close at 5 pm EST will tell the real story; it will be a crucial one for both buyers and sellers.

I remain short from just above the 1.2040 resistance level. It’s a position I’ve had on since the September 8th bearish pin bar. I’ll consider adding to the short position if and when sellers secure a daily close below 1.1875.

Alternatively, bullish price action from 1.1875 would signal another move higher. That said, it’s going to take a daily close above 1.2040 for bulls to keep this rally alive.

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EURUSD daily chart showing ascending channel support

Leave a Comment:

25 comments
japhet says

Yes sir, am watching this pair closely, patience is indeed key. Thanks for the good work Justin.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Michael says

Thanks Justin! It’s free fall from below 1.1875

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    Justin Bennett says

    You’re welcome. We’ll see where it lands at the New York close.

    Reply
Darius says

It looks like whole dollar index started to rise, so maybe thats why eurusd falls.

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Jason says

I’m too keenly watching but it seems bears will take the day…..

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    Justin Bennett says

    That’s the idea.

    Reply
Howard says

losing upward momentum:: latest leg shows shorter impulsive move, and wider corrective move including 3 shooting stars, with price now at bottom of channel

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    Justin Bennett says

    I agree with that. We’ll see where the session closes.

    Reply
Tims says

Thanks Justin… I appreciate your analysis always.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
mustapha says

hi justin
i can see a head and shoulders paterne it’s more clear in 4h chart with the necline at 1.1848 area
is it correct or not justin? and how to use it? thanks

Reply
    Justin Bennett says

    I don’t trade the head and shoulders on anything lower than the daily. I also wouldn’t call that a H&S pattern.

    Reply
Francis says

please 5pm EST is what time in Nigerian

Reply
    Tims says

    10pm

    Reply
Onyekachi Allen says

NICE ONE.

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Fabio says

Hi Justin,
I have placed sell stop order 8 pips below yesterday low.

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Steve Gallagher says

Great I got the first drop below 1.18380 to 1.18126 thanks for your continued expertizes

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    Justin Bennett says

    Anytime, Steve.

    Reply
Atichat says

Great job justin thank you very much

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    Justin Bennett says

    You’re welcome. Let me know if you have questions.

    Reply
Ric says

Been watching this pair for a while, taking not of the channel. Was almost prepared to go long at the bottom of the channel until it broke through yesterday! Went short at the low of yesterdays candle and already making good progress.

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    Justin Bennett says

    The price action since early September has been suggesting a move lower was likely. Yesterday’s close confirmed it.

    Reply
Ric says

Thanks for the reply. True, failure to make a new high is a telling sign. I’ve shied away from trading pin bars, as I’ve found that they are not always a compelling enough reason to take a trade. The rewards can be high though, as with your position! Many thanks, good work.

Reply
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