1.1100 Steps Up As EUR/USD Support
In contrast to Wednesday, the EUR/USD has produced a wide-open 86 pip trading range amid consistently robust participation.
The past four sessions have been wild ones for the EUR/USD. U.K. election results, as well as an overtly dovish commentary from the ECB, have brought heavy participation to the market. For the week, the EUR/USD is off 50+ pips. However, that may be soon to change; a sudden rush of bids has reversed the market from intraday lows (1.1101) and is threatening to drive rates higher by the close.
Time and time again, fundamental market drivers and key numbers greatly influence price action. This week, the election of Boris Johnson as U.K. Prime Minister and suggested quantitative easing from the ECB have been key fundamentals; the big-round-numbers of 1.1200 and 1.1100 have been the important technicals.
EUR/USD Rejects 1.1100
In contrast to Wednesday, the EUR/USD has produced a wide-open 86 pip trading range. Participation has been consistently robust, with whipsaw conditions between 1.1200 and 1.1100 being the story.
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Here are the important levels to watch in the EUR/USD during late-week trade:
- Resistance(1): Daily SMA, 1.1218
- Support(1): Swing Low, 1.1101
Bottom Line: At press time (11:15 AM EST), the EUR/USD is consolidating near the 1.1150 area. If we see the range extended north, a short trade with the prevailing daily bearish trend may set up by the weekend.
Until Friday’s closing bell, I will have sell orders queued up from beneath the Daily SMA at 1.1204. With an initial stop at 1.1229, this trade yields 25 pips on a standard 1:1 risk vs reward management plan.
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