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The EURUSD is bouncing this week along with most other risk assets.
But is it sustainable?
The euro did manage a close above 1.1700 yesterday against the US dollar.
You can see how 1.1700 served as support in early August.
However, EURUSD bulls aren’t out of the woods yet.
There are several other key resistance levels that could hold the pair back including 1.1800.
Furthermore, the price action over the last couple of weeks suggests to me that this EURUSD pullback isn’t over.
I’d like to see the pair retest the area between 1.1450 and 1.1500 before considering another long position.
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Remember that I was buying EURUSD in early July as it was coming out of a bull flag pattern.
That position netted over 500 pips.
I’m looking to do the same again, but not until EURUSD shows signs of bottoming.
Right now, I don’t see it.
As for future targets, I like EURUSD higher toward 1.2500 over the coming months.
There are several reasons why including the trend line from 2008 as well as the early 2018 swing high near 1.2500.
The 1.2500 area is also the 23.6% Fibonacci retracement of the 2008 to 2016 range.
In the near term, though, I wouldn’t be surprised to see EURUSD weaken further toward that 1.1450 to 1.1500 support area.
Of course, a daily close above 1.1800 could indicate the bottom is in.