EUR/USD Daily Double-Top Setup At 1.1500
Shain Vernier • 1 min read
Thus far for 2019, consolidation has been the rule for the EUR/USD. Rates have tightened between the 1.1500 and 1.1400 levels in an intense tug-o-war between market participants. Given the rapidly approaching FOMC Minutes release from the December meeting, this market may finally be poised to break out directionally.
Earlier in the U.S. session, several secondary economic reports came across the newswires. While these numbers do not typically move markets, many traders look at them for clues on where the economy may be headed. Here is today’s hard data:
Event Actual Previous
Redbook Index (YoY, Jan. 4) 8.9% 9.3%
JOLTS Job Openings (Nov.) 6.888M 7.131M
Both stats underperformed the previous release, signaling a moderate tapering off of employment and retail growth. However, it is important to remember that these figures remain relatively strong, as does the aggregate U.S. economy. Traders appear to agree with this assertion, driving rallies in the Greenback and U.S. indices.
EUR/USD Technical Outlook
On the EUR/USD daily chart, the 1.1500 level jumps off of the page as robust topside resistance. It has withstood two direct assaults, prompting bearish participation each time. Perhaps a dovish FOMC Minutes release will bring about another hard test of 1.1500.
A few levels to watch for the remainder of the forex session:
- Resistance(1): Double-Top Pattern, 1.1496-1.1499
- Support(1): Bollinger MP, 1.1387
- Support(2): Daily SMA, 1.1376
Overview: Over the past several weeks, shorting the 1.1500 level has been a good play. Rates have fallen off on each run at the big-round-number, creating windfall profits for shorts. Regardless of past success, nothing lasts forever.
1.1500 is currently set up as strong resistance, but may also serve as a launch point to the bull. In the event we see bids hit the EUR/USD in mass on tomorrow’s FOMC Minutes, rates may leave 1.1500 in the dust very quickly.