EURUSD Short Opportunity Takes Shape

·    May 16, 2024

·      May 16, 2024

·    May 16, 2024

EURUSD reversed from its 2021 trend line on Thursday, but there’s one level that could accelerate any downward pressure.

Watch today’s video for the details, including how I’m trading the pair, and get the latest on the US Dollar Index (DXY) as it catches a bid from channel support.

Let’s get started!

The EURUSD has enjoyed a bullish week overall but is reversing today from the 2021 trend line I’ve discussed recently.

Wednesday’s rally following a slightly cooler US CPI print was halted today at 1.0895, the same 2021 trend line I shared two days ago.

Shorts against that level offered the most favorable risk-to-reward ratio, although not necessarily the highest conviction idea.

The 1.0865 support region needs to fail on a daily closing basis for EURUSD sellers to regain control.

That would open up areas like 1.0800, and possibly the November 2022 trend line at 1.0650.

Alternatively, a EURUSD above 1.0860 would leave the pair caught between support and resistance and ultimately rather unfavorable.

If the euro can clear 1.0895 on the daily time frame, it would open up levels like 1.0925.

But keep in mind that the DXY would need to take out 104.00 support on the daily time frame for that to materialize.

Until then, I’ll remain cautiously bullish on the US dollar, with a DXY 104.50 reclaim helping to support that view.

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