The EURUSD fell below a key support level on Friday.
The pair not only broke the 1.1030 area, but it also carved a fresh multi-year low in the process.
From here, I would expect to see sellers defend 1.1030 as new resistance.
However, I also think that this new resistance area extends as high as 1.1060, which includes several lows from earlier this month.
Whether or not we get a retest of this area next week is anyone’s guess.
But I do think it’s necessary to see a 1.1030 retest, at minimum, to secure a favorable risk to reward ratio.
Otherwise, you’d be selling too close to the confluence of support at 1.0860/70.
To understand why 1.0860/70 is significant, take a look at the price action between October 2016 and May 2017.
Here’s a snapshot of it in action:
A retest of 1.1030/60 resistance next week could serve as an opportunity to get short.
And with at least 160 pips of profit potential on the way down, this is undoubtedly one to keep on your radar.
Only a daily close back above 1.1060 would negate the idea.
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Thanks J. also there is a head and shoulder pattern on daily with 1.1060 as neckline.
I see this retesting the 1.1108/9 horizontal resistance before heading for a final low of 1.0860 or 1.0820.
Nonetheless, we shall wait for the market to lead us.