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EURUSD Likely to Retest 1.0712 Resistance

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Last week the EURUSD crashed through several layers of support in epic fashion. And unless you were quick enough to enter on the March 29th retest of 1.0825, there weren’t many opportunities to get short, at least not without sacrificing a favorable risk to reward.

But the mad dash lower came to a halt yesterday at a support level I mentioned over the weekend. The 1.0635 handle has helped direct price action since November of last year and more recently served as resistance in late February and early March.

In fact, yesterday’s low was 1.0635 to the pip. And the bullish pin bar that resulted from the bounce hints at a move toward 1.0712 resistance.

But I’m not interested in buying the Euro. The velocity of last week’s decline and weekly bearish engulfing pattern are enough to keep me solely focused on selling opportunities for now.

With this in mind, I’ll be keeping an eye out for a sell signal should buyers manage a retest of 1.0712 over the coming sessions. If they breach this level on a daily closing basis, we could see the EURUSD return to the next resistance area between 1.0800 and 1.0825.

For now, though, the outlook remains bearish as long as the 1.0712 handle holds as resistance. Key support comes in at yesterday’s low of 1.0635 followed by recent lows at 1.0520.

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EURUSD daily chart

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