Buyers successfully defended a retest of resistance-turned-support at 1.345 in the euro FX futures during overnight trading Sunday evening, which could be the beginning of the next key swing move higher.
Taking a look at the daily chart shows 1.345 had been resistance throughout the year until price finally broke above it midway through September. This level has been support ever since, and continues to see buyers defend between 1.345 and 1.349.
Additionally, a clear trendline has developed beneath the lows of the recent advance, which began in July, adding additional confluence to the level.
If euro futures continue to hold above 1.345, I've got an ABCD measured move target at 1.4171 by the end of the year, with scaling points at 1.360, 1.3806, and the 1.400 round number. Of course, this implies that the C point is in at 1.3442, which is not yet confirmed.
If euro futures cannot hold the 1.345 pivot and a break occurs, we could see a further decline back toward prior support at 1.3105, with scaling points at 1.340 and 1.3260.
Where's the entry? It depends on how aggressive you want to be. An aggressive approach would be to buy a pullback to 1.348, with the option to add at 1.345 should a retest occur. Conservatively, you want to see price break and hold above 1.3528 before buying, or allowing price to rally first, and then buying a retest of the breakout point later.
On the downside, breaking and closing below 1.3440 is likely enough to trigger a sell.
Keep in mind, the euro has seen quite a bit of movement over the last few weeks, including last week's selloff. Price could be due for digestion, so I wouldn't be surprised to see price accumulate around the 1.345 pivot before the next move occurs