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The EURUSD tested a significant resistance area today.
We’ve had our eye on the 1.1170/80 region ever since the rally that began on the 11th of October.
You can see how this area capped the euro twice recently, once in October and a second time in early November.
Today’s rejection candle provides further evidence that 1.1170/80 is one to keep on your radar.
However, it’s also very close to the descending channel top that extends from the year-to-date high from January.
So even if the EURUSD were to close above 1.1180, a long position would be challenging given that the next resistance isn’t far away.
At the same time, any shorts are challenged by 1.1070 as well as channel support.
For these reasons, I think the EURUSD is a tough pair to trade right now.
As long as prices are above ascending channel support and below descending channel resistance, the euro will remain indecisive.
For the swing trader, that means waiting for a breakout.
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It could take weeks or even months, but that’s why I monitor over twenty currency pairs.
I think a daily close above the descending channel top around 1.1200 could be appealing for a move higher.
On the flip side, a close below ascending channel support near 1.1050 would signal weakness and would also expose 1.0990 and perhaps the 2019 lows.
Until one of these scenarios plays out, I think the EURUSD will be a challenging and perhaps undesirable pair to trade.