Today I’ll provide an update on our EURUSD target from yesterday, and discuss the must-hold level for the euro.
I’ll also discuss Tuesday’s US Dollar Index (DXY) retest of 105.60, and what to watch for clues about the dollar’s future direction.
Watch the video below and scroll down for the annotated charts and analysis.
Yesterday I discussed the EURUSD liquidity pocket that had developed between 1.0690 and 1.0670.
These areas typically serve as magnets for price, and this one was no exception.
EURUSD moved lower overnight from a breakdown I signaled in the Daily Price Action VIP group, which was good for about 50 pips.
The euro tested 1.0670 almost perfectly with a wick down to 1.0665 before bouncing.
We also saw the DXY test the 105.60 resistance area following Friday’s breakdown.
These are all levels I’ve discussed previously and ones we continue to analyze in the VIP group.
For now, the EURUSD is holding above 1.0690 and 1.0670, the latter being a must-hold level for euro bulls.
But the key for the euro will be whether it can maintain this throughout the week.
Today’s bounce isn’t as convincing as it could be, nor is the rejection from DXY 105.60.
If the DXY can reclaim the 105.60 region this week, it could turn the dollar bullish once more.
The same can be said regarding a sub 1.0670 close for EURUSD this week.
Both markets are holding key breaks from Friday, but the next few days should tell us whether that continues or reversals are in order.
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