Welcome to a brand spankin’ new trading year, errbody!
Ready to start your trading year with a bang?
We’ve got our eyes on EUR/USD possibly pulling back to a previous resistance zone:
EUR/USD 4-hour Forex Chart by TV
As you can see, the second half of December has been strong for the euro and weak for the U.S. dollar as more traders price in the Fed possibly loosening its monetary policies sooner than the European Central Bank (ECB) would.
EUR/USD, which bounced from the 1.0725 levels, shot up all the way to the 1.1125 area before EUR bears showed up.
Is EUR/USD done making new highs? Or are the euro bears just taking a breather?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the euro U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Or if you just got back to your trading desk after the holidays, you can also check out our 2024 FX Outlook to see what you can expect for the year ahead.
For now, a move to the 1.1000 psychological area may be in the works especially as the level lines up with the S1 Pivot Point line AND the mid-channel support in the 4-hour time frame.
Coincidentally, 1.1000 is also not too far from the potential 100 and 200 SMA dynamic support levels.
A bounce from the mid-channel area could open EUR/USD to a move back to its 1.1125 previous highs near today’s R1 (1.1120) Pivot Point resistance line. We could even see EUR/USD making new swing highs if we see enough momentum in the next few days.
Of course, it’s also possible that EUR/USD bears are just getting started. If the pair breaks and stays below the 1.1000 level that we’re eyeing, then EUR/USD could head for lower inflection points like 1.0900 or 1.0850 before seeing sustained buying pressure.