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The EURUSD has reached our first target at 1.0990 following the January 23rd close below key support.
You may recall the confluence of support at 1.1075 from any one of the last few weekly Forex forecasts.
I also mentioned how that 1.1075 area was part of a terminal pattern that could trigger a breakout back on December 27th.
So far, things have played out well for EURUSD sellers.
It seems the pair is finally regaining some of the momentum it had lost.
As for 1.0990, you can see how this level has been a factor for the EURUSD since September of last year.
Tuesday’s session carved a bullish pin bar from this area, but buyers failed to make anything of it.
It’s just as well as I have no intention of buying the EURUSD.
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As I’ve mentioned a few times recently, that January 23rd close below 1.1075 could be the key to the next leg lower for the euro.
It’s all happening within the descending channel that extends from the 2019 high.
Here’s a view from the weekly time frame:
So, while the 1.0990 may provide temporary support, I do think the January 23rd breakdown will prove significant over the coming weeks and months.
That is unless something shakes the USD off its pedestal.
But timing is still as important as ever, especially with the EURUSD above 1.0990 support.
The January 23rd breakdown was the short setup. Even the December 31st and January 16th candles produced opportunities for euro bears.
For now, though, it’s about waiting for the market to show its hand again.
That could occur with a daily close below 1.0990, or perhaps following a rotation higher into new resistance near 1.1050 or 1.1075.
Either way, the EURUSD may need some time to reset itself.