As mentioned numerous times over the past year, it’s going to be difficult for the USD to pose a lasting move without at least some participation from the Euro.
And as USD strength has come back, that’s reflected in EUR/USD. But, as this recent breakout has extended beyond the trendline looked at above, EUR/USD has started to show some reticence as it nears a major spot of support on the chart around the 1.1187-1.1212 zone.
That zone came into play in late-November and since, bears have avoided a re-test, helping to form an ascending triangle that eventually led to a bullish breakout around that CPI report two weeks ago. But, after finding resistance in the 1448-1500 zone, sellers have been in-control.
At this point, the 1.1300 level is coming into play and below that is another support level of note before the ‘big’ zone comes into play, and that’s at 1.1272.
Given the proximity to major support combined with the hesitation from sellers at support, this may be setting a bear trap ahead of the Fed.
EUR/USD 4Hour Price Chart
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