EUR/USD PRICE ACTION TIGHTENING UP AROUND MAJOR SUPPORTThe price action since last month has been tightening up in the Euro, making for a situation that could soon turn explosive as low volatility turns to high volatility. What is particularly interesting about this situation is that it is also occurring at a trend-line dating back to 1985 when you construct EUR/USD prior to the existence of the Euro from its constituents. Given the magnitude of the trend-line a major make or break situation is upon us.With price acting rather soft around the line with multiple and increasingly smaller bounces taking shape, probability is rising quickly that we see a breakdown. The first line of support to watch is 10768, followed by the important March low at 10635.A break of the latter line could quickly give EUR/USD separation from the trend-line towards the January 2017 low at 10340 and parity. Given the significance of the trend-line a break well beyond parity is certainly possible.If, however, support continues to hold it is possible a base is being built and EUR/USD is preparing to trade higher in a meaningful way. It is looking like the lesser likely scenario at this juncture, but one we can’t rule out. Support is support until it’s not.The first level of resistance to break to get things going is 10990, then the falling 200-day at 11046. Beyond there if momentum can pick up then we may see much higher levels come. But don’t be surprised if momentum starts to develop only to fail once again. The long-side has been tough since 2018, and until the Euro can prove itself this may be the case for some time to come.
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