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The EURUSD is in the process of testing former support at 1.1670 as new resistance. It took the single currency five days to do so following the October 26 close below the 1.1670 handle.
Today’s retest puts sellers in the hot seat. As long as they maintain sub 1.1670 prices into today’s close at 5 pm EST, the bearish outlook we’ve been discussing will remain in play.
However, if the EURUSD closes the day above the level, all bets are off for a move lower. It would also negate the head and shoulders pattern that has been developing over the past three months.
It’s moments like this when the daily charts become essential. Anything that happens before 5 pm EST is inconsequential as far as I’m concerned. That’s especially true given this week’s parade of high-impact news.
As long as 1.1670 holds as resistance on a daily closing basis, I will keep my target of 1.1300. Keep in mind, however, that I do anticipate an influx of buying pressure at 1.1490 if tested over the coming sessions.
Friday’s non-farm payroll at 8:30 am EST should also factor into your decision making process. I’m going to hold my short position through the event, but I also have a 190 pip buffer at the time of this writing.