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EURUSD Bulls Cling to 1.1400 Support

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EURUSD bulls are hanging by a thread.

I’ve been discussing the falling wedge since December 24th. Resistance extends from April 2018 and support began in November of 2017.

On January 7th, euro bulls took out resistance which at the time was near 1.1430.

The breakout was followed by consolidation on the 8th and then a 100-pip rally on the 9th.

Everything looked promising for buyers.

But the two-day pullback late last week turned out to be a sign of structural weakness in the bullish narrative.

And things only got worse during yesterday’s volatility that preceded the Brexit vote.

However, the selloff wasn’t a total surprise for readers of this site.

On Monday I wrote how a move below 1.1450 wouldn’t necessarily negate the bullish potential.

In fact, those were my exact words.

The “real” line in the sand here is former wedge resistance (blue line). That level is now serving as new support.

As long as EURUSD remains above it on a daily closing basis, euro bulls have a fighting chance.

Click here to get instant access to the same “New York close” charts I use.

It isn’t going to be easy though. So far today I do not see much demand in the 1.1400 area to suggest that further gains are likely.

But as we know, that can change in a hurry.

It’s also important to understand the risks here. The breakout on the 7th and subsequent rally could be nothing more than a false break.

That’s always a possibility regardless of how good the technicals may appear.

We’ll have more information to work with by today’s 5 pm EST close.

A close above 1.1395 or so would keep the bullish potential intact whereas a close below it would likely negate the bullish outlook.

With this much uncertainty, it makes sense to watch and wait for now.

A bullish pin bar or similar from the 1.1400 area could indicate a buying opportunity.

Alternatively, a daily close below 1.1395 would negate the idea altogether.

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EURUSD new support area at 1.1400

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9 comments
Dee says

Thank you sir

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Tsquare says

What have noticed about EU is that it may take like three months for it to break a resistance and when it does it may just less than 48 or 72 hours to see the bricks fall like a stone. Have seen more people make money from selling EU rallies over the years. Why is it that EU always find it difficult to hold to profits or there are some people manipulating EU price?

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Mohammed Ramzan Ansari says

Good analysis brother

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Rafal says

There is raising channel on eur/usd. It might happen it will cross with wedge support in the range of 1.35 and trigger buy.

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Layigold says

Great is my respect for your analysis and trade ideas . My bullish bias in EURUSD remains intact as long as the monthly outlook of dollar index still looks bearish.

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Prashant says

there is good bullish rsi divergencd on euro similar to crude on weeklies ..

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Arif says

Thank yuu pak justin..
Atas analisa ya.. bpk memang luar biasa

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Layigold says

For the past three days , EURUSD has been so quiet with and it is like the pair has made a low for the week at 1.1370 area( yesterday low) any move below that area would bring the pair to 1.1350–1.1300 area. I have added to my long position and my stop loss is below 1.1350. I cannot but appreciate Justin for the analysis he gives us here though , it is left for individual trader to take decision on his own

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Pierre Mifsud says

Although NO ONE can gauge exactly what may happen and WHEN next week although it potentially appears to roll over and retest the 1.2283 of the 12 November 2018 imminently in the next two weeks or before…..one thing is for sure that for the monthly time-frame the 1.09 handle is its final resting place

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