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The EURUSD is testing a resistance area I’ve mentioned several times over the last two months.
This descending channel top around 1.1200 is the same one I pointed out as the EURUSD was breaking higher on October 10th.
Now, here’s where things get interesting.
On the one hand, the EURUSD has closed above the recent highs at 1.1175.
Note how 1.1175 has capped every advance from the euro since mid-October.
But on the other, the descending channel top that extends from the 2019 high is still intact as resistance.
Notice how Monday’s session failed to close above 1.1200.
If you watched the most recently weekly Forex forecast video, you know that 1.1200 is the level buyers need to break.
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And an intraday spike won’t cut it.
I need to see a daily close above 1.1200 to confirm the bullish breakout.
Remember that I use New York close charts so that each 24-hour session opens and closes at 5 pm EST.
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If we do see the EURUSD close the day above 1.1200, all eyes will be on the next resistance area between 1.1280 and 1.1300.
But don’t dismiss the significance of 1.1200.
This descending channel has directed the price action for EURUSD since January, so I’d be surprised to see sellers go down without a fight.
That said, as long as the pair is above 1.1170 on a daily closing basis, I have to respect the short-term uptrend as I have done since September.
Alternatively, a daily close below 1.1170 would signal weakness.
It would also expose the confluence of support between 1.1070 and 1.1080.