EURUSD Follows Through on Last Week’s Failed Breakout

EURUSD is selling off again today, and there’s probably more sell-side pressure to come, but traders should mind Wednesday’s events.

Watch today’s video for the latest EURUSD key levels and targets, and get an update on the US Dollar Index (DXY).

The EURUSD is plunging today following Friday’s failure to hold above the 2021 trend line at 1.0860.

We discussed this failed breakout (fakeout) in Friday’s Weekly Forex Forecast.

It seems unlikely at this point that we see the EURUSD retest 1.0860 as new resistance, or anywhere close to that figure.

However, traders should avoid chasing the euro lower, especially with Wednesday’s US CPI and FOMC around the corner, not to mention Thursday’s US PPI.

These events will likely trigger intense volatility for the EURUSD, especially Wednesday’s FOMC rate decision and press conference.

If the pair closes today below 1.0790, that level should flip to resistance later this week.

Keep in mind that Friday’s aggressive 88-pip selloff left an imbalance above 1.0790 that could get “filled” during Wednesday’s volatility.

But as long as EURUSD remains below 1.0790 on a daily closing basis, any intraday buy-side liquidity sweeps are for selling, in my opinion.

My target for the euro remains the November 2022 trend line at 1.0660.

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