The EURUSD shot higher overnight after what appeared to be fallout from USD bulls over Trump’s latest political and national security gaffe. This morning’s weak U.S. housing starts and permits only exacerbated things for the greenback.
The combination of events left the common currency trading at its highest levels since November 9th U.S. elections last year. Even at this moment, the pair is trading just 12 pips below a current session high of 1.1088.
It also puts the Euro 90 pips above the trend line that extends from the February 2nd high. This is a level we’ve discussed several times in recent weeks and was also the location of the false break ahead of the May 7th run-off vote in France.
So is a EURUSD bullish break as good as done?
I can’t conclude that just yet as today’s intraday breakout is far from confirmed. That doesn’t mean it won’t happen as it most likely will, but it does introduce enough uncertainty to keep me on the sideline for now.
As you may well know, most of my decisions come from the daily time frame. More specifically, where a pair closes at 5 pm EST is the most significant and telling indicator in my opinion. And with four hours left in today’s session, anything can happen.
Where today closes is key because it will dictate the likely path forward. A close above 1.10 would suggest the rally is intact and re-expose the 1.1100 area and perhaps 1.1220 over the coming days.
Alternatively, a daily close back below 1.10 would negate the bullish outlook and re-expose 1.0860 followed by 1.0775. Although, that doesn’t seem likely given how the pair is holding gains thus far.
Want to see how we are trading this setup? Click here to get lifetime access.