Can EURUSD bulls hold the line at 1.1275 this week, or will Friday’s breakout fail?
Watch today’s video for the details, including my ideal trade setup for this week and a must-see update on the DXY.
EURUSD broke out last week, closing above 1.1200 and 1.1275. The pair also broke its descending channel resistance on Friday.
So far this week, the euro is pulling back as the US dollar rebounds. I warned about the 99.00 support area for the DXY in the last Weekly Forex Forecast.
Although there are no changes to recent forecasts, it’s always advisable to remain flexible, especially given the current market conditions.
If EURUSD fails to hold 1.1275 support this week, it could lead to a more significant correction. However, the 1.1275 region is key support until proven otherwise.
I would prefer to see a sustained break below 1.1275. Not because it’s likely right now, but because a failure at 1.1275 could lead to a high-probability short trade.
As mentioned last week, the DXY remains vulnerable while below 100.20. So, any euro short would need confirmation on multiple fronts.
There’s no shortage of targets if EURUSD fails at 1.1275 this week. The pair has a massive sell-side imbalance in the 1.0600 region following the March breakout.
Imbalances like that often serve as magnets for price. However, a valid trade setup requires a magnet (a viable target) and a trigger. In this case, the trigger for me would be a sustained break below 1.1275.
Until then, the EURUSD remains sideways, with 1.1275 serving as key support.
