Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
The EURUSD is bouncing hard from a support level I mentioned on Sunday.
The 1.1110 level supported the single currency on April 26th. That marked a multi-year low for the pair and triggered a 150 pip bounce.
In other words, you wouldn’t want to short into this level.
Although today’s session is still relatively young, if prices close above yesterday’s low at 1.1150, we could see EURUSD trend higher tomorrow and perhaps next week.
However, if buyers fail to close today’s session above 1.1150, it will be business as usual which means a continuation of the downtrend.
Today’s bounce may also be the start of a double bottom.
Given the 150 pip range between 1.1110 and 1.1260, a double bottom pattern here could produce a move as high as 1.1410.
Notice that 1.1410 served as resistance recently in February and March.
Just keep in mind that buying the EURUSD is a countertrend idea. As such it comes with greater risk which means position sizes need to be adjusted.
But all in all, this looks like it could be a short-term bottom for EURUSD.
The first stop for a move higher is the 1.1260 level I pointed out on Sunday. And if buyers can get through that, it’s on to 1.1410.
It all hinges on today’s close, though.
A 5 pm EST close above 1.1150 would offer a buy signal (the closer to the high of day the better).
Alternatively, a sub 1.1150 print into the close would likely produce another test of 1.1110 support.