The first EUR/USD break reported at the first of the month was 1.1104 then 1.1205 and 1.1104 would take EUR/USD higher. This was achieved early in the month. The monthly DXY V EUR/USD reported a 352 pip range while actual from 1.1104 to 1.1355 highs is 251 pips.
What remains is 101 pips to possibly take EUR/USD to 1.1456. Yet monthly brick walls were reported at 1.1352, 1.1381, 1.1398, 1.1406, 1.1418 and 1.1424. What is located at 1.1400’s is the multi year downslope trend line and a must break to see EUR/USD far higher over time with a first target at 1.1559 then 1.1800’s and top of the current channel at 1.2000’s. The warning to the 1.1400 break and seen for the first time since November 2015 is actual pip ranges for August at 500 above the normal 352. Actuals always trade below the normals since November 2015.
The Level at 1.1104 today is 1.1203 and 1.1205 is actual 1.1200. EUR/USD lower levels must see breaks at 1.1203 and 1.1200. Not much movement over a 3 week period and highs seen at 1.1355 and its why EUR/USD is not only overbought in its price but the massive overbought in range indicators reported in the last post now subsided. What we will see is EUR/USD back to its ranges.
Due to overbought prices and close to the trend line, strategy for the past week or so is hit shorts and not take EUR/USD long for 1 pip. why? EUR/USD remains a mainstay pair among the current 7 pairs we trade 3 times per day and every trading day for the past 2 + years. We wait for the resolution of 1.1400’s. A break means the trend line reverses and longs will be the way into a far distant future.
Further, best volatility and price movements will be seen in GBP pairs Vs EUR, NZD pairs V AUD and USD/CAD V USD/JPY and USD/CHF. In JPY cross pairs, GBP/JPY will see better price moves Vs EUR/JPY and NZD/JPY V AUD/JPY.
EUR/USD big breaks to travel higher for today is located from 1.1344 to 1.1349, 1.1352 and 1.1355, 1.1386. Then 1.1400’s starting from 1.1446, 1.1449 and 1.1471. The big break is located at 1.1386 to see 1.1400’s.
On the downside, today’s bottom is located at 1.1277 and reinforced by supports at 1.1266, 1.1267 and 1.1269. Why the massive supports is because a break of 1.1266 would see 1.1207 quickly. Overall, shorts must break 1.1203 and 1.1200 to see lower prices. Today’s range is a 1.1277 to 1.1286.
Brian Twomey, Inside the Currency Market, btwomey.com