There is a reason I have stayed away from buying the EURUSD in recent weeks, and it all comes down to a level that has played a significant role since the 2015 low. I have mentioned this level in just about every weekly forecast for the past year.
During yesterday’s session, the single currency tested the former support area as resistance for the second time since February.
Of course, I’m referring to former channel support that broke down last October. And as long as the pair remains below this handle on a daily closing basis, I will maintain a bearish bias.
But unlike the February retest, yesterday’s session gave us a sell signal in the form of a bearish pin bar. From here we could see the pair move back toward the 1.1340 handle with a break below that exposing 1.1210.
Keep in mind that this Friday is non-farm payrolls, an event that is always good for an increase in volatility. As such, any US dollar positioning should be managed with the assumption that Friday’s price action will make or break any predictions about the currency’s immediate path forward.
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