EURUSD is sitting on a confluence of support at 1.0700.
That’s the intersection of the November trend line and former range highs from December and early January.
Tuesday’s session tested that trend line and produced an indecision candle, which seems par for the course this week.
We also have a key resistance for EURUSD at 1.0780, which was tested earlier on Thursday.
So the game plan for bulls and bears is straightforward.
A daily close above 1.0780 should reinvigorate euro bulls for a move toward 1.0850 and potentially 1.0925.
It would also keep the short-term uptrend intact.
However, if EURUSD loses the 1.0700 support area, it would signal a more significant pullback toward previous range lows at 1.0480.
Remember that a daily close (using New York close charts) above 1.0780 or below 1.0700 is required to confirm the above scenarios.
Lastly, don’t forget about the US Dollar Index (DXY) as it battles with the 103.50 area.
I’ve mentioned this critical region for DXY previously, and we still need a resolution.
The dollar index is trading below 103.50. However, dollar bulls are trying to hold onto former channel resistance as new support.
Given the lack of clarity, it may take another day or two before we have a definitive answer as to the US dollar’s future direction.
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