Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
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On August 9th I pointed out a resistance area on the EURUSD that was likely to attract an influx of selling pressure. The 1.1620 area was the location of former wedge support that held in late June and throughout July.
I also discussed this 1.1620 area in the August 5th weekly forecast. It didn’t take long for the market to retest former wedge support as new resistance, and by August 9th the pair was under immense pressure.
To be honest, my entry was a bit premature, although it still worked out nicely. I entered during the August 3rd retest just above the 1.1600 handle. Those who waited to go short the next week probably secured an even better entry closer to 1.1620.
Earlier this morning I decided to book my profit of 286 pips as the market reached my target just above 1.1300. I never intended this to be a long-term hold such as my EURCAD short which I’ve shared several times recently.
As for the EURUSD, we could see a bid form in the 1.1300 region. It’s the objective of the wedge pattern below as well as the November 2016 U.S. elections high. You can also see where the 1.1300 area served as a pivot between June and July of last year.
I do want to be clear though that I am in no way bullish the Euro. In fact, I just sold it against another currency this morning. More on that later.
For now, it’s going to take a daily close (New York 5 pm EST) below the 1.1300 handle to open up additional targets. The next key support below 1.1300 comes in at 1.1125 followed by 1.0865.
If buyers can organize a bid at 1.1300, there is a chance we could see a return to former support at 1.1500, which is now resistance. That said, I see nothing at the moment to make me think buyers can pull off a 200 pip relief rally. Of course, that can change in a hurry.
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