Key EUR/USD Levels On The Horizon
Shain Vernier • 1 min read
It has been a tight week for the EUR/USD, with rates rotating around the 1.1050 level. This doesn’t come as much of as surprise as currency traders are still in the process of pricing in the dovish FED and ECB. Factor in October’s Brexit timeline, and there are more than a few fundamentals at play in this market.
For today’s session, the bears have dominated participation. Rates are off more than 25 pips and have fallen below daily resistance. While the EUR/USD remains in a consolidation phase between 1.1000 and 1.1050, a short-term bearish bias is warranted at the moment.
Key Support Levels In View For The EUR/USD
The 1.1000-1.1050 area has drawn heavy two-way action for several weeks. Given the overtly dovish tone of the international banking community, one has to wonder if the EUR/USD is going anywhere ahead of Brexit.
Here are two important support levels to keep an eye on for early next week’s trade:
- Support(1): 78% Current Wave Retracement, 1.0960
- Support(2): Double Bottom, 1.0926-27
Overview: Until we see rates break beneath support or back above resistance, a reversion-to-the-mean strategy is a good way to trade the EUR/USD. With the current ECB and FED actions behind us, this market is unlikely to trend until the leadup to the E.U. Summit in a few weeks. While we will surely see periodic pricing volatility before then, a definitive move under 1.0900 or above 1.1100 is improbable.
With a bit of luck, the EUR/USD will sell-off toward the support levels outlined above. Should this come to pass, a buying opportunity may set up by Wednesday of next week. As always, stay tuned for details on how to get in on the action.