This week’s bounce from the EURUSD is no surprise.
We’ve been discussing the significance of the support area between 1.0990 and 1.1020 since November 5.
In that post, I also pointed out the short-term ascending channel that extends from the year-to-date low.
The EURUSD was likely to move into this 1.0990 to 1.1020 area following the November 6 close below 1.1070, which we also discussed.
Notice that Thursday’s low was 1.0989, just one pip below the 1.0990 support level I was interested in per my post from two days ago.
That 1.0990 handle is also where the EURUSD bounced following the bullish breakout in October.
Thursday’s 38 pip bounce also carved a buy signal.
Note how Thursday’s range engulfed Wednesday’s, making it a bullish engulfing candle.
I was able to get long here at 1.1000, which I also announced within the Daily Price Action membership site.
So far, so good from the EURUSD.
However, keep in mind that the next key resistance at 1.1070 isn’t far away.
There’s no doubt we’ll see sellers try to defend this area next week, so attempting to buy the EURUSD now may be ill-advised.
But as long as the pair holds above this week’s low going forward, I do favor buying weakness for a move higher.
A daily close above 1.1070 would expose the 1.1170/80 highs.
The “daily close” refers to the New York 5 pm EST close. These charts provide five 24-hour sessions each week and are essential for trading price action the way I do.
Go here to get access to the same Forex charts I use.– Justin Bennett
I still maintain the idea that the euro could be on the move for a retest of the 2018 descending channel top just above 1.1200.
We’ve studied this channel several times since September.
It’s what caused me to turn bullish on the EURUSD in late September when the pair was testing the 1.0900 region.
That would equal a 200 pip rally from today’s price.
Alternatively, another run at 1.0990 support next week would be a sign of weakness.
That said, it’s going to take a daily close below ascending channel support to negate the short-term bullish potential, in my opinion.