Is the EURUSD still a buy?
If so, where might the pair find support?
Watch the video below to find out what I think.
Be sure to also scroll down for more commentary and an annotated chart.[thrive_custom_box title=”” style=”dark” type=”color” color=”#fef5c4″ border=”fadf98″]
Subscribe on YouTube to get notified when I post new Forex videos!
The EURUSD has had an impressive run so far in October.
I was anticipating a bounce of some sort when the pair was trading around the 1.0900 based on the broader descending channel from August 2018.
We’ve discussed this support area several times.
The most detailed explanation was the post on September 23 where I highlighted three reasons why EURUSD sellers needed to be careful.
The euro tried to break out on October 10, but the actual break didn’t come until the 11th when the pair closed at 1.1036.
You can even see how the September 15 session retested 1.0990 as new support.
What followed was a 190 pip rally.
So where to next for the EURUSD?
While nobody knows where the EURUSD is going, or any market for that matter, we can use the recent price action to determine what’s likely.
Let’s start with the obvious.
So far this week, we’re seeing the first sign of profit-taking since the pair broke out from the 1.0990 area.
But that’s to be expected after a 190 pip rally.
I also have no reason to believe buyers have folded.
As of right now, this is a mere correction within an impulsive move higher.
This may also present an opportunity to buy EURUSD, but only if we see the pair start to base at one of two key support areas.
The first comes in just above the 1.1100 handle.
You can see how 1.1100/10 supported the pair between April and May before attracting sellers on September 13.
1.1100/10 is also the 23.6% Fibonacci retracement of the latest rally from 1.0879 to 1.1179.
Any bullish price action from 1.1100/10 could signal the next leg higher for the euro.
On the other hand, a push below 1.1100 would have us watching for a buy signal from the 1.1070 support region.
This is a level we’ve had our eye on for weeks, and it’s also close to the 38.2% Fibonacci of the range I mentioned above.
As long as the EURUSD is above that 1.1070 level, I favor buying the pair for a move toward 1.1200 and perhaps the descending channel top near 1.1250.
If we see this pullback start to accelerate, though, it may be best to stand aside.
I also think that a daily close below 1.1070 would leave a black mark on this rally effort and also expose 1.0990.
[thrive_custom_box title=”” style=”dark” type=”color” color=”#fef5c4″ border=”fadf98″]
Want daily videos of the currency pairs I’m trading?
Get a Lifetime Membership Today and receive exclusive member-only content including one to two new videos every day. Save 40% in October!