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EURUSD: Will Sellers Hold 1.0596 Into the Close?

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On Friday of last week, we looked at a trend line on the EURUSD that extends from the current 2017 low. It was unclear at the time whether or not the 1.0590 area would become a factor.

Buyers appear to have held the line into Friday’s close. However, yesterday’s session failed to gain any traction and closed right near the trend line at 1.0594.

So even with almost 48 hours of trade since the last commentary, it’s still unclear whether the pair is reacting to this trend line or not.

As I mentioned in a previous lesson, whenever there is ambiguity surrounding a key level I like to take a wait-and-see approach. More specifically, I watch to see whether the market respects the area into the New York close at 5 pm EST.

In the case of the EURUSD, I would need to see a daily close near 1.0596 to keep the immediate downside pressure intact. But even if buyers manage a close above this area, they will still need to deal with the 1.0635 handle which will likely attract an influx of offers if tested.

I’m sitting this one out for now, but I’ll be keeping an eye on the price action into today’s close at 5 pm EST.

Note that the holiday week has created a liquidity drain hence the somewhat limited movement across the majors. Keep this in mind especially as we approach some of the event risk later this week as it could impact volatility as well as spreads.

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EURUSD daily chart

Leave a Comment:

6 comments
Dimitris Tzaninis says

how come in my charts the last bearish candle has closed below the very same trendline? does my broker try to entrap me?

Reply
    Justin Bennett says

    Dimitris, you’re probably not using a New York close chart. You’ll need to ask your broker.

    Reply
Joel Mukwemu says

I think we are currently looking at a pullback on the daily chart from some selling pressure recently seen on the pair. It could pull back to the 1.06400 region or rather the 20 EMA before the sellers continue driving the price downward. If pull back continues and today’s NY session closes near the 1.06400 level we can expect some selling pressure afterwards.

Reply
    Joel Mukwemu says

    10 and 9 EMA actually not 20.

    Reply
Graeme Normington says

Thanks Justin. Bye the way, I have a potential wedge pattern on my chart. Top line connecting 3rd Dec 2015 low, 5th Dec 2015 high, 2nd Feb 2017 high, 27th March 2017 close – bottom line connecting 3rd Jan 2017 low & 2nd March 2017 low. Is this a potential wedge & if so is it bullish?

Reply
    Justin Bennett says

    Graeme, it could be. Whether it’s bullish or bearish depends on what the pair does over time.

    Reply
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