The 1.0500 level is still a very important level for the Euro
The 1.0500 level marked a significant area for EURUSD. It had been a strong S&R area going back to 2015, and even as far back as the early 2000's. It's one of those levels not to be underestimated.
EURUSD daily chart
Pushing aside the long-term aspects of the level we need to know what's happening here and now.
The break lower after the FOMC looked solid enough but we're finding that the price is happy to break back above, and then fall back below. That shows plenty of indecision in the market. A real break would hold solidly below 1.0500, and retest the low 1.03's, then hold a 1.05 bounce and head lower again. It tried but failed. The same has happened when it's broken above 1.05 today, we tried to hold above but failed. Now we're back below and 1.05 is resisting.
EURUSD 15m chart
Switching back to a wider perspective, I previously noted that a real break lower for the euro would need to see the whole of the 1.05-1.03 area cleared so while we can't do that, everything is still in the balance and why 1.05 is the key level here.
If you're trading short-term then you longs are the trade if we get above, and hold above 1.05. Conversely, if we go below and hold below, then shorts are the better trade. You can then use the intraday levels to gauge your profit points. Stops can be kept fairly tight if the price moves the other way through 1.05 and holds.
For the longer-term traders, you can hold some comfort if you're long from lower down, and we're above 1.05, while shorts can take comfort if you're short from higher up but below 1.05.
This is one of those levels where you can balance your trades on a single number. We don't know where the price is going to go but being able to ask a simple question at one stand out level is pure gold. I'm building longs so I'm of the opinion that the price is going up. I'll only be assessing that position is we fall below 1.03 but I'm still more nervous while it's holding below 1.05.
Only a real sustained hold below or above 1.05 will determine the next major direction for the pair and if you watch the signals, you'll have no excuse for not being prepared. when that happens, and it will happen.
