Today’s EURUSD breakdown brings the pair closer to my Q1 2025 target, but could late shorts get squeezed first?
Check out today’s video to see how I’m trading EURUSD this month and get the latest insights on the DXY.
The EURUSD is kicking off the new year with a breakdown, a move I highlighted back in December.
The ongoing downtrend since October, lower highs into 1.0350 support, and the “magnet” effect of parity were all signs of this potential drop heading into 2025.
For clarity, the “magnet” is the weekly and monthly imbalance near 1.0000.
Parity is a psychological level that tends to attract price action, especially as the market gets closer to it.
Considering these factors, a move toward parity was the logical scenario.
While EURUSD still has ground to cover before hitting 1.0000, today’s break below 1.0350 is a critical step in that direction.
If sellers can confirm this breakdown and keep EURUSD below 1.0350, the next likely stop is parity.
However, Thursday’s test of 1.0222 support introduces the potential for a short-term bounce.
Add in the imbalances forming near 1.0350, and a recovery toward that level isn’t out of the question this week.
That said, as long as EURUSD stays below 1.0350 on higher time frames, my Q1 target for the euro remains 1.0000.
