The euro is up big this week, but bulls face a major test with Thursday’s European Central Bank (ECB) rate decision and Friday’s non-farm payroll (NFP).
Watch today’s video to see how I’m trading EURUSD and DXY this week.
EURUSD has had a strong start to March, rallying over 400 pips since last Friday’s test of the 2025 open.
However, bulls have just reached a key level I’ve been watching for months.
The 1.0777 level was an open imbalance from the November breakdown.
Imbalances like this tend to fill, especially as price gets closer to them, but they can also act as key support and resistance levels.
Meanwhile, the DXY has given traders little reason to be bullish on the US dollar or bearish on the euro.
Wednesday’s retest of the 104.60 level I’ve mentioned in recent videos could change that, but it’s unclear if today’s move is significant.
For the US dollar to turn bullish, the DXY needs to secure a daily close above key levels like 105.40.
It would also need a close above the December trend line near 105.70 to confirm strength.
Until then, there’s no technical reason to shift to a bullish USD outlook.
EURUSD remains bullish while above 1.0670 on a daily closing basis.
That said, I think EURUSD bulls should be cautious at 1.0777, especially if the pair surges into the 1.0850 region ahead of Thursday’s ECB and Friday’s NFP.
