Daily Price Action
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EURUSD Looks Vulnerable Despite Recent Gains

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

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On Sunday I mentioned how the EURUSD seemed to be struggling to move higher from an intraday trend line. However, I didn’t offer many clues as to the trend line in question or its role in the bigger picture.

Here’s why I think the EURUSD is vulnerable…

The April 20 break below wedge support was a significant development. The lower level extended from the April 2017 low while the upper boundary of the wedge dates back to the 2008 high.

After sliding nearly 800 pips between April 20 and May 29, the single currency rebounded higher on May 30. The aggressive nature of that rebound caused many traders to flip from bearish to bullish, and rightfully so.

But to what extent? The terms “bullish” and “bearish” area meaningless without context. In fact, they don’t make sense without attaching them to a timeline of some sort.

Yes, the EURUSD has churned higher since May 30 which may justify a bullish label in the short-term. However, the 4-hour chart below shows something rather worrying for Euro bulls that could put an end to their run.

Unless the pair can move higher from this short-term trend line from the May 30 low, the Euro is likely in for another round of pain. Notice also how the pair has started to lean on support and failed to gather enough momentum on June 7 to test resistance near 1.1880.

I’ve seen this type of price action before and can tell you that it usually leads to a breakdown. Whether or not it will happen and if sellers can follow through are the two unknowns at this point.

As I pointed out on Sunday, if the EURUSD manages a daily close (New York 5 pm EST) above 1.1830, it would be a massive relief for buyers. It would also expose the next key resistance at 1.1940 and put my bearish scenario above on the backburner.

If, however, sellers do manage to clear the short-term support below, EURUSD bulls will be forced to retreat back to 1.1720 and perhaps 1.1650.

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EURUSD 4-hour channel

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12 comments
ONYEISI says

Thank you, any comment on AUDUSD

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ANETOR IBIKUNLE says

Thanks Justin. Please i wanna ask you something. The Market has been somewhat moving up and down without any precise direction of late. Is This a Summer Effect or Maybe its Just me??

Reply
    Justin Bennett says

    Markets alternate between trending and consolidating. We’ve had some decent trends of late, so now we’re getting consolidation.

    Reply
      ANETOR IBIKUNLE says

      Okay Thanks

      Reply
Adziz says

Justin I purchased your forex swing trading course and have still not received it. It’s been 24 hours. I’ve sent two web enquirers to no response….

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    Justin Bennett says

    Right, I don’t usually check email over the weekend. I’ll get back to you shortly, but I can guarantee access instructions were emailed. If you paid with PayPal, you need to check the email associated with your account.

    Reply
      Adziz says

      I received no such email. I only received access link to the FREE ultimate forex swing trading cheat sheet. I then purchased the course shortly thereafter.

      Reply
        Adziz says

        Ah I received the access email to my paypal email. My apologies. All sorted. Thanks justin

        Reply
    Auwal Aliyu umar says

    Aziz have you purchase the course?

    Reply
Omotayo says

Big thanks Justin…..
Any news on EURJPY?

Reply
    Ogbobe ebere says

    Hi
    Pls can I chat you on watsapp

    Reply
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