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EURUSD Future Direction Hinges on This

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If you saw last weekend’s market forecast video, you know the EURUSD is sitting on multi-decade support.

The support level is the bottom of an ascending channel that began in the 2000s, and it currently sits at 1.088.

EURUSD weekly multi-decade channel
EURUSD weekly time frame

Note that this is the same level that supported the market in March 2020. So in many ways, we can say that this is the most significant inflection point in the post-COVID era.

The euro tested this area on Friday and traded below it briefly today. However, buyers have stepped in since then.

We’ll have to see where today closes to know whether or not 1.088 support will continue to hold.

But as I mentioned in Saturday’s video, keeping EURUSD above support is only half the battle.

For the euro to turn bullish again, buyers need to reclaim the 2008 trend line at 1.1080. The pair lost this support level last week.

And even if the EURUSD reclaimed 1.1080 resistance, it would still be making lower highs since the start of 2021.

To change that, we’d have to see the market take out 1.1480.

So as you can see, even though the euro is at a critical support today, it has a ton of work to do to flip bullish again.

Alternatively, a close below the 1.088 region would likely flip that area to resistance and open up 1.065. Below that is 1.035.

I think buying the EURUSD here is risky. At the same time, shorting it is ill-advised given the multi-decade support just below the current price.

The highest conviction play for bulls, in my opinion, will be a reclaim of 1.1080 on a daily closing basis to re-expose 1.1480.

Bears will probably be rewarded with a confirmed close below support, followed by a rounded retest of the 1.088 region as new resistance.

As always, none of the above is financial advice as it’s just my opinion.

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EURUSD daily chart at support
EURUSD daily time frame

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5 comments
Justin Bennett says

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ALEX says

THANKS SIR JUSTIN

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Sera says

Thanks for the update😊

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    Justin Bennett says

    You’re welcome.

    Reply
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