EUR/USD Trading Below Support Near The 1.1600 Handle
Shain Vernier • 1 min read
It has been a rocky week for EUR/USD bulls, with price falling to the 1.1600 handle. The Greenback is threatening to extend gains against the Euro in the wake of this morning’s economic data releases. If sentiment does not shift soon, we may be in for another test of 1.1500 next week.
Earlier in the session, there were several U.S. economic reports that came across the wires. The numbers are fairly positive, especially in the manufacturing and employment sectors. Here is a quick look at the data:
Event Actual Projected
Continuing Jobless Claims (July 6) 1.751M 1.730M
Initial Jobless Claims (July 13) 207K 220K
Philadelphia FED (July) 25.7 22.0
Aside from the lagging Continuing Jobless Claims, the statistics look good. The Philadelphia FED Manufacturing Index has been impressive most of 2018 and did not disappoint. In total, these numbers have helped the USD post nice gains against the Euro.
After threatening to test a critical long-term topside resistance level on Monday, it has been all downhill for the EUR/USD.
At press time, price is rotating near the 1.1600 handle. If we see a move in the next 24 hours, then a trade opportunity from support/resistance will present itself.
Here are the levels to watch for the remainder of the week:
- Resistance(1): Bollinger MP, Daily SMA, 1.1651
- Support(1): Double Bottom, 1.1510-1.1508
Bottom Line: I am a big fan of converging indicators and that is what we have setting up as topside resistance. The Bollinger MP and Daily SMA are both at 1.1651. When taken in conjunction with the round number of 1.1650, this is a nice place to short.
Until Friday’s close, sells from 1.1649 are a good way to join the prevailing bearish trend. With an initial stop loss at 1.1676, this trade yields 27 pips using a 1:1 risk vs reward ratio.