EUR/USD looked like it was poised for a bullish breakout after last Friday’s disappointing US NFP jobs report. Let’s follow up on the reaction because the bullish push lost steam during the Monday 4/6 session. (Video at the end of article)
As we can see in the 4H chart, price stalled at 1.1040 again, a previous resistance. This tells us 2 main things.
1) Bulls are not strong enough yet and the market is still neutral-bearish since EUR/USD reached a low on the year at 1.0462. Before that, it was simply bearish.
2) The fact that there are a lot of sellers at 1.1040 means that a lot of stops are probably just above it. This means, a break above 1.1040 or maybe 1.11 should send the EUR/USD rallying sharply in the short-term. Still, we should limit the bullish outlook in this scenario to a previous support pivot around 1.1270. The most aggressive outlook should probably still be limited to the 1.1440-50 area.
Now, if price retreats below 1.08, we are likely in bearish continuation and the EUR/USD would be pressured first to the 1.07-1.0715 area, then the 1.0462 low on the year.
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