Delayed release note: Due to issues on our email provider platform, we are sending this week's Fx analysis today. The original post was published on our website homepage yesterday as usual.

It’s time to look at the monthly EURUSD chart again to highlight the importance of the current juncture on the charts.

EURUSD (same with the broad DXY index) is at a big inflexion point, hitting a multi-month and multi-year resistance area at 1.08 - 1.10. This zone on the charts is a defining point for the big EURUSD bear trend that started last year. For instance, this is where the Covid lows from March 2020 and multiple other past lows are located. 

The bearish break below the 1.08 - 1.10 area last June was a significant event, and as long as EURUSD trades under it, the long-term technical bias will stay bearish. The current bullish move is a major challenge to the resistance here. Some reaction looks increasingly likely here when we consider that EURUSD is already at overbought levels on lower timeframes (weekly, daily).

A break above 1.08 - 1.10 sometime this year would indicate that last year’s breakout below it was “fake”. On the other hand, if 1.08 - 1.10 holds as resistance, EURUSD returning back toward parity will remain a live scenario.