• The EUR/USD has broken lower in early trading
• Daily S4 is identified at a price of 1.0984
• EUR/USD reversals begin at 1.0998
The EUR/USD has broken lower this morning on broad US Dollar strength. The currency pair has already delcined as much as 61 pips and is current trading below today’s S4 which is found at a price of 1.0984. The breakout occuing this morning is just the first breakout for the EUR/USD since the Feds FOMC rate decision last week. If this momentum continues, and prices continue to trade lower on the day, traders may see this mornings price action as an attempt for the pair to return back towards its prevailing downtrend. It should be noted that today’s trading range measures 29 pips. This means breakout traders, looking for a 1x extension of the range, may look for initial targets for the pair at a price of 1.0955
If prices begin to reverse off of the daily low found at 1.0968, today’s breakout would be invalidated if prices move back inside of the trading range denoted below. Range support can be found at the S3 at a price of 1.0998. A reversal of price through this value, opens the EUR/USD up to further advances in price towards values of resistance. This would include the R3 found at 1.1027. In this alternative reversal scenario, the current breakout environment would be considered concluded. At this point traders can opt to change positioning based off of the new market conditions.