On Wednesday we discussed the rebound in the EURUSD after reaching our short-term target at 1.0520. In that commentary, I mentioned how the 1.0635 handle was a key factor in determining the most likely path forward.
In truth, if a valid sell signal had surfaced during yesterday’s session, I would have been compelled to enter short. But no such signal emerged.
Instead, yesterday’s session closed nearly 40 pips above 1.0635, indicating that buyers were in the driver’s seat. Fast forward to today, and we can see the pair is now challenging the validity of this level as new support.
Levels such as 1.0635 are significant when assessing market sentiment. While we won’t have any answers until today’s close at 5 pm EST, the final print will likely determine the direction for next week.
A weekly close above 1.0635 would suggest higher prices are in store and expose the next level of resistance at 1.0715.
Alternatively, a weekly close below 1.0635 would mean that yesterday’s break was false. In which case I’ll be interested in shorting the pair next week for a move toward the 1.0520 handle and possibly 1.0366.
But for now, the only thing that matters is the final print at 5 pm EST. We’ll revisit the EURUSD over the weekend before the new trading week begins.
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