On June 29th, I wrote about a EURUSD channel.
The descending nature of the channel, along with the recent uptrend, suggested it could act like a bull flag pattern.
In other words, it hinted at a bullish continuation.
On July 6th, EURUSD closed above that channel, which I discussed here.
We also reviewed the price action surrounding this breakout in last Sunday’s forecast video.
Then on Tuesday, the euro closed above the 1.1350 resistance level.
As you can see, 1.1350 had served as resistance ever since the pair tested it on June 16th.
Tuesday’s break above 1.1350 triggered a run at the top of the descending channel at 1.1420, another level I spoke about on Sunday.
But as you can see, buyers have had some trouble at 1.1420.
So is it time to short EURUSD?
Not for me, it isn’t.
I remain long here from 1.1299, which I also announced within the membership site on July 7th.
Some weakness or even a pullback into 1.1350 as new support isn’t out of the question, but I don’t think buyers are done just yet.
As I mentioned two weekends ago, the final objective of this latest breakout could be near 1.1600.
That’s the top of the multi-year wedge pattern that we’ve discussed since May.
So, although EURUSD could struggle at 1.1420 and again at 1.1500, we may not see a significant pullback until 1.1600.
That’s only the case as long as the multi-year wedge pattern above stays intact.
I also want to see the euro stay above 1.1350 on a daily closing basis.
A daily close back below that level would signal weakness and would also kick me out of my long position.
Alternatively, a close above 1.1420 would expose 1.1500 followed by 1.1600.
That’s my base case for now.