Daily Price Action
Shares

EURUSD: Friday’s Breakout Being Put to the Test

Shares

The recent EURUSD breakout is being put to the test as I write this. Friday’s NFP-inspired close above 1.0635 was no doubt bullish, but I needed to see more from buyers to convince me that it was sustainable.

In fact, three things are preventing me from taking a bullish stance at the moment.

  1. The trend for the better part of a year has been bearish
  2. Resistance at 1.0680 is holding on a daily closing basis
  3. Key Fed rate decision is less than 24 hours away

The pair is currently retesting the 1.0635 handle as new support. This is a level we’ve discussed for quite some time. It even served as a selling opportunity on the February 20th retest.

Although today’s session is far from over, there’s been an interesting development on the intraday charts. The latest 4-hour close put the single currency back below 1.0635.

Now, I’ll be the first to say that a daily close (5 pm EST) trumps a 4-hour close any day of the week. But if Friday’s breakout has any merit at all, we should see buyers flock to the 1.0635 area.

I don’t see a flurry of bids, at least not yet. Instead, I see a pair at risk of slipping back below the level. If this continues and the pair does indeed close today below 1.0635, we can label Friday’s move as a false break.

But as noted above, Wednesday’s Fed rate decision at 2 pm EST is more than enough to keep me sidelined. I certainly don’t want to take on USD exposure in front of such a heavy-hitting event.

Key resistance at the moment remains the 1.0680 area. A daily close below 1.0635 would re-expose support at 1.0520.

Want to see how we are trading this setup? Click here to get lifetime access.

EURUSD narrow range

Leave a Comment:

2 comments
Nothando says

Once ago thank you for the great insight. I just wanted to know after the support has been retested it doesn’t break going down. Do I immediately enter going up or should one wait for candle sign

Reply
    Justin Bennett says

    Nothando, that’s up to you. But as I stated above, I won’t be doing anything here due to the upcoming Fed rate decision.

    Reply
Add Your Reply