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EURUSD Bulls Need a Daily Close Above 1.1460

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On Christmas Eve I wrote about a possible bullish pattern on EURUSD.

Since coming off the multi-year high in April 2018, the euro has carved what appears to be a falling wedge.

We viewed the structure on the weekly chart on Monday, but the daily time frame works just as well.

It was wedge resistance that capped the December 20th rally.

In fact, it was a combination of the 1.1450 horizontal level and wedge resistance which at the time was closer to 1.1480.

Fast forward to today, and the EURUSD is on the verge of breaking out.

You can see that falling wedge resistance is now at 1.1460. However, buyers also have to deal with the 1.1450 horizontal level.

As always, it’s going to take a daily close above 1.1460 to get the job done.

Want instant access to the same “New York close” charts I use? Go here.

You don’t want to attempt trading a breakout on the intraday charts. Even the 4-hour time frame is not enough here in my opinion.

A level this significant requires a daily close above it to confirm the break.

A daily and weekly close would be even better.

But as long as EURUSD trades below 1.1450/60 on a daily closing basis, the pair is vulnerable.

That said, I still think the price action since December 20th hints at an imminent breakout.

Whenever a market begins to hover just below resistance for an extended period, a breakout usually isn’t far away.

The GBPUSD is in a similar situation.

What interests me the most here is the 1,000 pip height of the wedge. Once broken, markets tend to traverse the same distance as the height of the structure.

That would put EURUSD just below the 1.2500 handle or about 1.2460.

I know many of you will find that difficult to accept. The euro has been weak for some time, and much of the rhetoric out there is bearish.

But as I wrote on Monday: thinking you know where a market is going is a dangerous business.

It’s better to let the market do the talking. And right now, EURUSD is signaling it wants to move higher if 1.1460 resistance falls.

A daily close above 1.1460 would expose 1.1530 followed by 1.1620.

Alternatively, a failure to close above 1.1450/60 would keep the single currency under pressure in the short-term.

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EURUSD daily wedge pattern

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18 comments
Ehiz says

Thanks J.. I have a similar bias also a clear look at DXY you will see a similar wedge pattern DxY at the wedge support EU at wedge resistance. Waiting patiently to see who is going to win this fight. Cheers

Reply
    Justin Bennett says

    Right, I’ve been discussing the DXY technicals and how they compare to EURUSD in the member’s area for the last couple weeks.

    Reply
      Pierre Mifsud says

      The DXY should be strengthening not weakening for all those who DO NOT know to at least 99.13

      Reply
Tommy Workman says

I was just wondering if this is the same reasoning banks and other influential institutions use? Of course they would like around hunting for stops!

Reply
    World's best trader says

    You may not be far from the truth

    Reply
    Justin Bennett says

    Technical analysis? Sure, at least to some degree.

    Reply
Jim J. says

Regarding eur/usd needing to close above 1.1450/60 for a bullish breakout potentially… is there no significance that we are in end of year holiday trading mode whereas markets aren’t in their typical state of liquidity/price action? Does it matter at all whatsoever?

Reply
    Justin Bennett says

    Sure, but only if the market gives you an indication that it matters as in a false break. So far, we haven’t seen that.

    Reply
Pierre Mifsud says

EURO strength does not really convince me, it just cannot break that wedge resistance when the USD is already weak…..Euro has already reached 1.6250 in EURAUD, nearly 1.56 in EURCAD and 0.9050 in EURGBP….If it goes another 1000 pips up what will happen to these pairs?

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    Ehiz says

    That is excellent question. but that is where correlation comes in for example look at how far EURJPY, has gone. As long as EURUSD, remain in that wedge and DXY also remain in the wedge it’s a waiting game. at the closing today they both closed at resistance and support.

    Reply
    Stevo says

    EURUSD up for 1000 pips,that might be because of the DXY weakening..

    Reply
    Justin Bennett says

    It hasn’t broken it so far. That doesn’t mean it won’t.

    Reply
Abdus Salam says

Thanks for analysis eurusd. Now need Gold analysi…

Reply
    Justin Bennett says

    You’re welcome.

    Reply
    Simon says

    bullish watch retracement

    Reply
Euginia possible says

For me that might be true but let’s watch.

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Simon says

E/U range bound up to 1.1750 -1.1800 according to my crystal ball

Reply
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