The US Dollar Index (DXY) tested key resistance yesterday, but what does that mean for EURUSD?
In today’s video, I break down where EURUSD bulls might face challenges and highlight the area I’m eyeing for a potential short entry.
EURUSD is up today due to a weaker US dollar, following a lower-than-expected JOLTS job openings report.
This move isn’t surprising since the DXY tested the lower part of the resistance area I’ve been discussing for the past few weeks.
I recently mentioned that 101.92 is where the DXY resistance begins, and Tuesday’s high hit exactly 101.92.
We also saw the euro testing key support above 1.1000, while GBPUSD bounced from the 1.3100 support level I highlighted yesterday.
Whether EURUSD forms a lower high now depends on what happens at the 1.1110-1.1140 resistance zone.
Euro bulls recently lost ground there, flipping that area into new resistance.
It also marks the top of the ascending channel from July.
As for the DXY, the 101.00 lows are significant and could determine whether we see a lower low for the DXY or another test of the 100.60 support.
As I’ve mentioned in recent videos, the 102.00 to 102.40 area remains crucial resistance for the US dollar.
Until USD bulls reclaim that level, buying the dollar within this DXY range is risky.
I’ll be watching for bearish price action from EURUSD between 1.1110 and 1.1140.
Keep in mind that this Friday is non-farm payroll, so expect some volatility heading into the weekend.
