Talking Points
- EURUSD Bounces off Range Support
- Price Breakout Signaled Above 1.3395
- Prices Below R3 Signal Return to Ranging Markets
EURGBP 30min Chart
(Created using FXCM’s Marketscope 2.0 charts)
The EURUSD has tested and reversed at multiple levels of support and resistance in early U.S session trading. First price tested S3 range support at 1.3355. Price promptly reversed, on worse than expected U.S Advanced Retail Sales numbers. As the US Dollar sold off, the EURUSD rallied not only through range support at 1.3382 but continued to advance over the R4 breakout value found above at 1.3395. Currently, traders will continue to watch this value to see if the pair will advance on higher highs. A continued price move above 1.3395 would allow positioning in the direction with current market momentum.
At present, price has returned to the R4 pivot. This creates the possibility of a false breakout on further declines below this designated resistance value. Traders should watch for price to return inside of the denoted trading range, to signal a change in market conditions. If bullish momentum fades, traders should then consider exiting any existing breakout based positions.
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---Written by Walker England, Trading Instructor
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Previous Market Setups:
FX Reversals: GBPUSD Market Breakout
FX Reversals: EURUSD Reversal Range
FX Reversals: AUDUSD Morning Breakout