Traders need to mind last week’s imbalance and how 1.0725 could play a pivotal role early this week.
Get all the details in today’s video, including the latest on the US Dollar Index (DXY).
EURUSD is testing the underside of 1.0725 today after closing last week below it.
That’s a key level for the euro and one that could dictate where the pair goes early this week.
It’s no coincidence that we’re also seeing the DXY pull back some from the 105.60 key level I’ve mentioned a few times this month.
If the EURUSD can close today above 1.0725, we could see further relief toward 1.0770-1.0800.
That’s the imbalance from Thursday’s aggressive selloff.
Note that EURUSD opened Friday’s session and moved immediately lower without much of a “fill” of Thursday’s candle, so that imbalance is still a factor.
There’s also a EURUSD intraday descending channel forming with resistance potentially becoming a factor on Tuesday or Wednesday in the 1.0770-1.0800 region.
What happens from there will determine whether the euro heads back to test the 2021 trend line at 1.0850 or reverses lower toward 1.0650.
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