Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
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The EURUSD unwind continues. The April 20 close below the twelve-month trend line that extends from the April 2017 low was apparently what sellers needed to jump on the bandwagon.
On Sunday, I mentioned how we might get a bounce higher to start the week. Friday’s bullish candle looked promising for a selling opportunity at higher levels, perhaps 1.2240, but Euro bears had other plans.
Monday’s close below the 1.2090 handle opened the door to the next key support at 1.1930. Believe it or not, the EURUSD is just 40 pips from the level as I type this.
While I do anticipate an influx of buying pressure at 1.1930, I’m not expecting a complete reversal. In fact, I’ll view any strength here as a potential opportunity to get short.
That said, it’s important not to chase. Even the most aggressive moves need time to cool off and shift hands a bit. The EURUSD is no different.
From here it’s just a matter of playing the ranges. A move back to the 1.2090 area could offer a chance to get short. Alternatively, a daily close (using a New York close chart) below 1.1930 would pave the way for a move to 1.1830 followed by 1.1700.
Keep in mind that we have a Fed rate decision and statement today at 2 pm EST. Non-farm payroll is also this Friday at its usual time of 8:30 am EST. Be sure to account for these events if you plan on trading the U.S. dollar this week.