EURUSD is seeing some relief today, breaking above a 4-hour descending channel I discussed in Saturday’s Weekly Forex Forecast.
It isn’t surprising, given how aggressive the selloff from the euro has been since May 4th.
I’d also expect additional relief going into June as you tend to get an early month retracement after a big move like this.
If EURUSD bulls can flip this 1.0700 area to support today, we could see gains toward 1.0760.
However, the 1.0760 resistance area will be a massive challenge for euro bulls considering last week closed below it.
A 4-hour and daily reclaim above 1.0760 would expose 1.0830
But all of the above is contingent on bulls flipping 1.0710 today.
And keep your eye on the US Dollar Index (DXY) if you’re trading the EURUSD or any major currency pair.
Today’s session is showing some weakness at the 104.20 resistance area I mentioned in Saturday’s video.
We’ll see if the DXY tests the 103.50 yearly open as support from here or if dollar bulls can secure a close above 104.20.
I wouldn’t be surprised to see some consolidation between 103.50 and 104.20.
Consolidation following an aggressive run-up like we saw from DXY earlier this month would be normal and healthy.
Conversely, a sustained break above the 104.20 region would expose 105.00 and the 105.60 range highs.
Given the dollar’s strength and market structure, any relief for EURUSD in June may be short-lived.
I think we ultimately see EURUSD trade toward the 1.0600 region, but maybe not before some consolidation within the current range.