It has been a wild day on the markets, featuring a plunge in  WTI crude oil and U.S. equities. The Greenback hasn’t been spared from the damage, as values are on the retreat against the forex majors. Following a bullish early-session, the EUR/USD has posted a major reversal from intraday lows near the 1.1100 handle. This is an important technical development, as the day’s price action has created a daily Double Bottom pattern.

On a side note, yet another U.S. Treasuries auction has produced lagging returns on short-term government debt. 4-Week T-Bill yields fell to 2.335% from 2.365%, extending the trend of lagging debt performance. Many conclusions may be drawn from this event, but it does suggest that institutional players are not shying away from June equities exposure.

EUR/USD Forms Double Bottom

The daily chart in the EUR/USD gives us an idea of how important psychological barriers can be. 1.1100 is panning out to be such an area, attracting robust bidding to the Euro.

As of this writing, the bullish bounce from 1.1100 is in full swing. Subsequently, two topside resistance levels are coming into view:

• Resistance(1): Bollinger MP, 1.1191
• Resistance(2): Daily SMA, 1.1191

Bottom Line: Moving forward, the daily Double Bottom at 1.1110 is going to be a key technical level. In the event we see a resurgent dollar in the near term, this may provide a solid buying opportunity.

Given the intraday strength in this market, selling is a higher-risk proposition than usual. However, short-term sells from 1.1191 are an affordable way to trade the action. With an initial stop at 1.1206, this trade produces 15 pips on a standard 1:1 risk vs reward ratio.