October’s Uptrend Is Intact For EUR/USD
Shain Vernier • 2 min read
October was a big month for EUR/USD bulls, featuring a pronounced daily uptrend. Rates rallied by 255 pips, closing the month above 1.1150. Relief from avoiding a 31 October “no-deal” Brexit has been deemed the primary culprit behind the move. However, thus far for November, the market dynamic has begun to shift. Rates are well off last month’s highs, but are holding above the 1.1000 psychological barrier. Is a major change in course heading the EUR/USD’s way as 2019 draws to a close?
A directional move ahead of 2020 is certainly a possibility. The U.S. FED is supposedly done cutting rates for the year and the U.K. snap election is coming up on 12 December. These two fundamentals are very likely to drive stiff action to the EUR/USD.
If one is picking a side in the EUR/USD for the near-term, a bullish bias is warranted. Rates rejected the 62% Fibonacci Retracement of October’s range, preserving October’s daily uptrend. Subsequently, currency players are bidding this pair aggressively, driving today’s steep intraday bullish trend.
October’s Uptrend Remains Valid For The EUR/USD
In a Live Market Update from Thursday, I broke down the importance of the 62% Fibonacci support level at 1.0993. Since that time, rates have continued north and appear poised for a late-week run at 1.1100.
Here are the levels to watch until the closing bell:
- Resistance(1): Daily SMA, 1.1073
- Resistance(2): Bollinger MP, 1.1087
Bottom Line: At press time (about 2:00 PM EST), the EUR/USD is on the bull above 1.1050. In the event the late-session rally continues, a short from just beneath the Daily SMA may set up ahead of the weekend.
For the remainder of the trading day, I will have sell orders queued up from 1.1071. With an initial stop at 1.1109, this trade produces 35 pips on a slightly-sub 1:1 risk vs reward management plan.