Last weekend, I discussed a potential short opportunity on EURUSD.
I didn’t personally take the trade due to the market’s indecisiveness over the last few weeks.
Those who did short EURUSD made out exceptionally well this week.
Notice how the EURUSD broke below the 1.2070 channel support early this week.
That’s the pattern I pointed out last weekend.
As always, broken support levels become resistance.
Monday’s 1.2049 close meant that the 1.2080 region was now resistance.
Sure enough, we saw the EURUSD selloff right from that area and it is still down about 180 pips.
So, where to from here?
If the EURUSD doesn’t close this week above 1.1900 today, the pair could be in trouble as we head into next week.
Notice how the 1.1900 region was a key (weekly) resistance area last year.
A weekly close below 1.1900 would signal further downside for next week.
It would also open the door to the late 2020 range support near 1.1630.
Alternatively, a close above 1.1900 today would keep the area intact as support.
That could be enough for a bounce next week toward 1.2000.
However, the structure for the EURUSD has changed from bullish to bearish, at least in the short term.
For that reason, I won’t be buying the euro.
I may look to short the pair near 1.2000 next week, depending on how things unfold between now and then.