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EURUSD is approaching a make or break area at 1.1260.
I’ve mentioned this region several times in recent weeks. For one, it served as resistance for the euro in the first half of May.
Furthermore, the 1.1250/60 area is the support level of what is now an ascending channel that extends from the May 30th low.
We’ll have to wait and see how the market wants to treat this channel. But given the longer-term downtrend here, I’m anticipating a break lower.
The EURUSD is in a downtrend until it isn’t. Until we see the pair carve higher highs, I have to favor shorts.
In the case of the EURUSD, that means a close above 1.1410 or thereabouts.
I won’t be interested in selling EURUSD, however, until sellers clear channel support on a daily closing basis.
If sellers can get the job done, we could see the euro trend toward year-to-date lows at 1.1110.
Alternatively, bullish price action from the 1.1260 area would re-expose the 1.1330 area and perhaps trigger another test of 1.1410.