The EURUSD once again finds itself wedged between support and resistance ahead of the weekend. It seems the additional five sessions haven’t produced much of a resolution compared to where we were last Friday.
However, there is one thing we can draw from the past week’s price action. The trend line from the current 2017 low is holding as support, albeit by a single pip.
I mentioned the EURUSD on Tuesday as we watched to see whether sellers would hold prices below the trend line into the close. Although we did get a bit of a selloff in the final hours, buyers ultimately prevailed.
So where to from here?
For next week I’ll be watching to see if sellers can break trend line support on a daily closing basis. If they do, a retest of the area as new resistance could establish a favorable short opportunity.
The next key support would come in at 1.0520 followed by the multi-year lows near 1.0370.
On the flip side, should buyers push prices higher next week, I’ll watch for bearish price action from 1.0712 or perhaps 1.0775. Either way, I’m in no hurry to trade the pair, and I certainly won’t be playing this on the intraday charts due to the heightened volatility of late.
Given the long-term bearish trend, I’m only interested in selling opportunities for now. This outlook is backed by the 260 pip bearish engulfing week that emerged in late March.
However, that pattern has been somewhat contradicted by this week’s bearish engulfing week on the U.S. Dollar Index (DXY). The contradiction is all the more reason to stay patient and wait for the market to make the first move.
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