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EURUSD Bulls Capitulate at 1.0825

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EURUSD bulls have lost the 1.0825 handle. It started with yesterday’s close at 1.0812 and continued with today’s high of 1.0825 which was met immediately by selling pressure.

Here’s how the daily chart looks at the moment:

EURUSD false break

The 1.0825 area is one I mentioned over the weekend. It’s a level that dates back to 1999 and was also responsible for the February 2nd bearish pin bar earlier this year. That sell signal triggered a 330 pip selloff.

Moreover, 1.0825 is the 38.2% Fibonacci retracement when measuring from the 2016 high at 1.1615 to the current 2017 low at 1.0340.

So yesterday’s close back below this area seems to be a significant development. But it wasn’t shocking considering the U.S. Dollar Index (DXY) slammed into a confluence of support at 99.00 to start the week.

From here I’ll be watching for selling opportunities while the pair trades below 1.0825 on a daily closing basis. The former 4-hour channel support you see below could also offer an opportunity to get short.

The next key support comes in at 1.0712. A daily close below that would expose the 1.0635 handle, a level we’ve discussed several times over the past few weeks.

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EURUSD break of channel

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2 comments
Graeme Normington says

Thanks Justin. I have been watching this market. On 28th we had a bearish engulfing candle at previous major resistance zone around 1.0870. The bearish engulfing candle gave a 2 day bearish pin bar when combining the previous days open & close. I went short on the close ( 1.0812) of the bearish engulfing candle. My question is, would it have been wiser to have waited for another confirmation signal? Kind regards: Graeme (Trading from Cairns Australia)

Reply
    Justin Bennett says

    You’re welcome. It all depends on what works best for you. Apparently, that was a good decision to short when you did.

    Reply
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