Just yesterday we looked at how the EURUSD once again encountered sellers at the 2008 trend line. It’s a level that has capped every advance from the single currency for the better part of 2018.
What began Tuesday as a mild selloff accelerated during yesterday’s session. The 1.2308 close puts the pair back below the short-term trend line that extends from the February 16 high.
Yesterday I wrote that if this short-term trend line broke down, we could see another run at the April 2017 trend line. That’s now a reality following yesterday’s close.
At the moment that April 2017 trend line comes in near 1.2220/40. Naturally, the fact that it’s a trend line means the price at which the market interacts with it may change.
If the EURUSD retraces some of yesterday’s move, I would expect the pair to encounter an influx of selling pressure near 1.2320/30. This is the February 16 trend line that broke down with Wednesday’s close.
Whether or not you find this 100 pip range (1.2220/40 to 1.2330) attractive depends on your style of trading. As I pointed out yesterday, I’m more interested in an eventual break of this long-standing terminal pattern.
I’m not a fan of trading a consolidating market, especially when the range narrows to this degree. An eventual break of the 2008 trend line resistance or the April 2017 support, on the other hand, would likely trigger a multi-month run.