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EURUSD: Next Leg Lower to Materialize Below 1.0870

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On Tuesday, I wrote about a multi-year pattern on the EURUSD.

I even called it the most pivotal pattern in the euro’s history.

It was a bold claim, but I stand by what I wrote.

It’s my view that the wedge pattern below will dictate the future direction of the EURUSD for years to come.

EURUSD monthly time frame

Using conservative targets, the structure above suggests a move to either the 2008 high at 1.6000 or the 2000 lows near 0.8300.

That’s about 5,000 pips above or 2,700 pips below today’s price.

It’s incredibly difficult to imagine any scenario where the EURUSD rallies 5,000 pips higher back to the 2008 high.

Furthermore, the last three months have tested the lower boundary of the wedge pattern above.

Some traders may see that as a good thing as it suggests a stronger support level.

However, I don’t share their optimism.

Repeated retests of a multi-year support level is indicative of a weak market, not a strong one.

It suggests there aren’t enough EURUSD buyers to move price off of wedge support near 1.0700.

I was so confident in my view that I announced my short position to members in Tuesday’s member-only video.

You can see how the pair broke the 4-hour rising wedge I pointed out on Tuesday, and my short is now positive by more than 100 pips.

Now, that does not mean the EURUSD can’t move higher.

Nobody knows what the outcome will be here, and that’s never been more important to understand than now.

That said, the more EURUSD sellers pressure the bottom of the wedge pattern near 1.0700, the more likely it is that the euro will capitulate.

As for the present situation, a close below the short-term trend line from year-to-date lows could push the pair toward 1.0700.

Want to watch the EURUSD video I just released in the member’s area?

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EURUSD 4-hour time frame

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13 comments
Justin Bennett says

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Martin Njeru says

Thanks man ..you forgot to touch on NZDUSD or AUDUSD……………..Then which time frame do you use to enter the market?

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    Justin Bennett says

    You’re welcome. I didn’t forget. I’m simply more focused on the EURUSD at the moment.

    Reply
Samuel says

Thanks for this beautiful updates please.

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    Justin Bennett says

    You’re welcome.

    Reply
Ojiisanusa says

Justin…I agree fully with you…I had this picked out and thought maybe I’m off…then you post your thought…great minds think alike as they say…but I was wondering why you didn’t mention that the monthly tread line goes all the way back to 85…just woundering

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    Justin Bennett says

    I saw that too, but it’s a minor detail as the level is relatively unchanged. Furthermore, the euro wasn’t adopted until 1999, which means the 2000 low of 0.8225 is the euro’s all-time low. Any pricing data before January 1999, I believe, was GDP weighted from a basket of pre-euro currencies.

    Reply
Keith Plumbe says

Spot on once again! A really good short set-up on the EUR/USD this morning. Have a great weekend.

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nabil says

Hi,
Thx for set up . However do you mean it will be flash crash for 2700 pips in one shot or in target in stages ??

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nabil says

If you think euro will target lower levels , this means USD will be the strongest ,and thus it is not good for USA exports.??!! how come??

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nabil says

Hi
Why you do not reply to me ?

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jeevitha says

nice analysis, I have a question for you? what is difference between your YouTube channel member and normal member ? means variance in benefits’. am trying to reach your phone number listed in website, but couldn’t reach .thank you

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    nabil says

    Your analysis is not correct at all.

    Reply
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