Last Thursday, I commented on the EURUSD stalemate around the 1.1230 area.
I noted how the pair had broken below the 1.1230 handle, but I was skeptical about the potential for further losses.
The reason for my skepticism was that a falling wedge had formed on the intraday charts.
I pointed out this pattern in Saturday’s forecast video as well.
The bottom of that wedge pattern came in just above the 1.1150 key level, somewhere around 1.1170.
It just so happens that the EURUSD caught a bid from 1.1170 during Monday’s session.
I also mentioned on Saturday that everyone should prepare for a rotation back into 1.1230, which could trigger a break higher.
So far, Tuesday’s session is doing just that.
So where to from here?
I like the idea of a higher EURUSD as long as the 1.1230 area holds as new support.
However, 1.1350 is going to be a significant hurdle for buyers.
Notice how 1.1350 served as a pivot throughout the first half of June.
A rejection from 1.1350 could send the pair back to 1.1300 or even 1.1280, but I do think the euro will break 1.1350 eventually.
That would expose the next key resistance just above the 1.1400 handle.
And if EURUSD can manage a close above 1.1420, a test of the year-to-date high just below 1.1500 seems like a formality.
For now, though, keep an eye on how EURUSD reacts between 1.1350 resistance and 1.1230 support.
Minor support levels include 1.1300 and 1.1280.
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