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EURUSD is following the storyline I wrote about on June 29th.
In fact, I first mentioned the possibility of a descending channel in the June 28th weekly forecast.
Given the rally between May and early June, this descending channel looked like a bull flag pattern.
Last Thursday tested the top of the channel near 1.1290, but the market wasn’t quite ready to break free.
Friday’s action was limited with the 4th of July US holiday inbound.
However, now that volume has picked up again, the EURUSD is breaking free and is currently trading well above that 1.1260/70 area I mentioned on Sunday.
As always, it’s going to take a daily close above 1.1260/70 to confirm the breakout.
But that doesn’t mean you couldn’t have bought in last week.
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The way the pair was hovering just below channel resistance suggested that a break higher was imminent.
Traders also shouldn’t forget about the multi-year wedge pattern.
I’ve been showcasing the structure above in each weekly forecast, as it’s still an incredibly significant pattern, in my opinion.
As of now, the top of that multi-year wedge comes in near the 1.1600 handle.
Before buyers worry about 1.1600, though, they need to get through 1.1350, 1.1420, and 1.1500.
EURUSD bulls are testing 1.1350 as I type this.
I do expect sellers to defend that area, particularly considering that today’s session was up 100 pips at session highs.
That means the new battleground will take place between 1.1270 and 1.1350.