EURUSD bears finally managed a daily close (5 pm EST) below channel support last week. We have discussed the potential for a shift lower since the pair carved out the September 8th bearish pin bar from 1.2040.
Monday’s close of 1.1845 broke channel support along with the 1.1875 horizontal support area. Sellers took control of the following two sessions until buyers stepped up on Thursday and Friday to force a retest of the September 14th low at 1.1837.
Before last week, buyers hadn’t given up a handle since late April. Every time the pair has closed a session above a key level, they haven’t given it back.
It is true that the single currency has dipped below support levels since April. We’ve even seen a few lower wicks pierce the 1.1875 area starting with the August 31st bullish rejection candle.
However, buyers have always lifted the price back above support before the New York close at 5 pm EST. This has been the case since the single currency claimed the 1.0860 handle on April 24th.
This is an important observation because it offers some insight into the September 25th breakdown. While there are never any guarantees, I do anticipate at least one more leg down toward 1.1670.
In fact, I’m partial to a move toward the 1.1490 area and perhaps 1.1300 before it’s all over. I could be wrong, but it would be difficult to deny that the single currency was and still is in need of a pullback.
Any bearish price action from the 1.1840/75 resistance area this week could offer a favorable opportunity to get short. The first target would be the August low at 1.1670.
Source: bit.ly/2xMcYrS
Monday’s close of 1.1845 broke channel support along with the 1.1875 horizontal support area. Sellers took control of the following two sessions until buyers stepped up on Thursday and Friday to force a retest of the September 14th low at 1.1837.
Before last week, buyers hadn’t given up a handle since late April. Every time the pair has closed a session above a key level, they haven’t given it back.
It is true that the single currency has dipped below support levels since April. We’ve even seen a few lower wicks pierce the 1.1875 area starting with the August 31st bullish rejection candle.
However, buyers have always lifted the price back above support before the New York close at 5 pm EST. This has been the case since the single currency claimed the 1.0860 handle on April 24th.
This is an important observation because it offers some insight into the September 25th breakdown. While there are never any guarantees, I do anticipate at least one more leg down toward 1.1670.
In fact, I’m partial to a move toward the 1.1490 area and perhaps 1.1300 before it’s all over. I could be wrong, but it would be difficult to deny that the single currency was and still is in need of a pullback.
Any bearish price action from the 1.1840/75 resistance area this week could offer a favorable opportunity to get short. The first target would be the August low at 1.1670.
Source: bit.ly/2xMcYrS