The euro recently broke its March trend line, but Friday’s rebound put bulls back in control, at least for now. Will it last, and what’s the best way to approach EURUSD in August?
Watch today’s video for key insights on trading EURUSD, and get the latest on the DXY.
EURUSD produced a significant bullish reclaim last week. Friday’s rally and weekly close above 1.1450 confirmed the reclaim, opening the door to higher levels.
However, the euro closed last week at the 1.1585 resistance level. So far, EURUSD sellers are defending 1.1585 this week. The question is, will we see the pair retrace part of Friday’s rally?
While nobody knows the answer to that, there is an imbalance at 1.1440 that could serve as a “magnet” for EURUSD. That’s the single print from Friday’s move, plus there’s a fair value gap at 1.1460.
Trying to buy the euro early this week is risky. The pair is below the 1.1585 resistance level, and we haven’t seen much of a retrace of Friday’s rally.
Ideally, the EURUSD pulls back into the 1.1440 to 1.1460 region this week. That could offer an opportunity for fresh longs following Friday’s bullish reclaim toward levels like 1.1585 and 1.1685.
EURUSD also has two open single prints from the July 28th selloff. Those may align with the DXY’s imbalances near 97.74, which is just above the confluence of support at 97.70.
To recap, there’s no guarantee we see a partial retrace of Friday’s move of either the EURUSD or DXY. However, at the same time, attempting to long the euro without one is risky and ill-advised.
