Will EURUSD target the range lows this week, or will bulls push the euro higher?
Watch today’s video for the key levels on both EURUSD and the US Dollar Index (DXY).
The EURUSD remains in a sideways range to start the week, with sellers defending the 1.1140 to 1.1180 region.
This is especially clear on the DXY, which held above 100.60 last week.
That’s why I mentioned in the Weekly Forex Forecast to be cautious about expecting US dollar weakness, given the DXY held support on Friday.
The big question is, what will it take for EURUSD to become a short?
In my view, 1.1110 is the key level to watch this week.
This is particularly evident on the daily time frame.
Notice how 1.1110 acted as support on August 22nd, then flipped to resistance on September 5th and 6th.
It’s no coincidence the euro stayed above 1.1110 last week and continues to hold today.
Sellers need to break below 1.1110 to target the 1.1000 range lows.
However, an intraday break won’t be enough.
Sellers need a daily close below that level to confirm further downside.
The DXY shows a similar situation just above 101.00.
A sustained break above 101.05 on the DXY could expose the 102.00 range highs.
Until then, there’s no technical reason to be bullish on the US dollar.
At the same time, getting bearish on the USD while the DXY is above 100.60 isn’t advisable.
