EURUSD bulls are close to breaking free again after 72 hours of consolidation.
I first wrote about the potential for a move higher from the euro on September 6.
We also examined three reasons why sellers needed to be careful on September 23.
You can see that EURUSD has bounced from the 1.1100/10 support zone following October’s 200 pip rally.
It’s a key area I pointed out in Tuesday’s EURUSD video.
However, what you may not know is that 1.1100/10 was actually a confluence of support when the pair tested it overnight.
Remember that a confluence of support or resistance is nothing more than an intersection of two or more key levels.
In the case of EURUSD, it was the 1.1100/10 horizontal level and channel support.
Here’s a view of the confluence I’m referring to on the 1-hour time frame:
I posted this 1-hour channel in the member’s area on Tuesday, noting that this consolidation could trigger the next leg higher.
Sure enough, the pair rallied over 30 pips after reaching a low of 1.1106 on Wednesday.
But EURUSD bulls have more work to do.
So far, they have yet to clear the channel top that outlines the recent consolidation.
The daily time frame also hasn’t produced a confirmed buy signal.
That said, we can clearly see that the EURUSD is catching a bid at this first key support area at 1.1100/10.
And just as I mentioned in Tuesday’s video, if we don’t see a buy signal from 1.1100/10, be sure to keep an eye on 1.1070.
Keep in mind too that we have a slew of European data over the next 24 hours in the form of PMI results.
Thursday also hosts an ECB rate decision and statement at 7:45 am EST and 8:30 am EST, respectively.
Regardless of the outcome of these events, expect higher than usual volatility from the euro.
A push higher from 1.1100/10 would target 1.1200 and perhaps the descending channel top near 1.1250.
Alternatively, a close below 1.1100/10 would expose 1.1070 support.