Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
Is this a triple bottom for EURUSD or consolidation before the next leg lower?
Watch the video below to see my thoughts on the euro.
Don’t forget to scroll down for more commentary and an annotated chart.
EURUSD is sitting on a critical support level today.
We’ve discussed the significance of this 1.0900/30 support area in recent posts and videos.
You can see how the euro encountered buyers here on September 3 and again on the 12th.
I also mentioned the area just below 1.1000 recently.
Notice how EURUSD held above this level between the 11th and 24th before closing below it on Wednesday.
But this is where things get tricky.
Without factoring in the broader descending channel from 2018, one would expect EURUSD to continue much lower if 1.0930 support fails.
There’s a problem with that, though.
The problem is that we do have a broader channel that began in August 2018.
In fact, that level could extend as far back as the November 2017 low depending on how you draw it.
The problem, then, with the idea of a much lower EURUSD is the fact that 2018 (perhaps 2017) channel support comes in at 1.0900.
That doesn’t allow much downside potential here.
Of course, just because channel support comes in at 1.0900 doesn’t mean the pair must respect it.
Markets break support and resistance levels all the time.
That said, I wouldn’t want to sell the euro down here knowing that a thirteen-month support level is just 60 pips below the current price.
On the flip side, buying the euro doesn’t sound appealing either.
We have key resistance at 1.0990 followed by the smaller descending channel top near 1.1030/40.
And don’t forget about the 1.1070 horizontal level.
All in all, the EURUSD is going to need to break free from this range between 1.0900 and 1.1070 before we see a favorable opportunity.
You could, of course, attempt trading between the levels shown below.
But if you’re a breakout/swing trader like myself, you will probably want to wait for some clarity and momentum before trading the euro.