EUR/USD Falling Wedge Failure Drives Dollar BreakoutEuro / U.S. DollarFOREXCOM:EURUSDFOREXcomNot all formations come to fruition... While many look to predict price moves I think that most experienced traders ultimately find the effort as somewhat pointless. And, instead, analysis can be mainly useful in the effort of finding asymmetry. So that if something does play out as it should, the potential upside could be large. If it doesn't, risk can be contained, the loss mitigated and then precious capital can be focused on more fruitful pursuits. In EUR/USD there was a falling wedge formation that had held from a key bounce of support at the 1.1748 level. But as markets incorporated risk from the weekend events, heavy selling in the Euro showed and that helped to drive the USD, which was somewhat of an abnormality from what had shown over the prior couple of months where the Japanese Yen and the loaded up long-term carry trade had brought incredible impact across the DXY basket. After all - the 1.2000 breakout test in EUR/USD was driven by something - and it doesn't seem as though any narratives around European fundamentals would fit. But the heavy sell-off in USD/JPY caused USD selling across the board, ultimately lifting the EUR/USD pair in a manner quite similar to Q3 of 2024 when we last saw intense carry unwind in USD/JPY. But, perhaps more important for EUR/USD at this point - is what's next. The breakdown on Monday and Tuesday fast moved into oversold levels on the four-hour chart and so far we've seen a bounce from that condition. I talked about this topic on the USD in late-January, when the currency hurriedly pushed into oversold territory - and the point then was to wait and see if sellers jumped in on a test of lower-high resistance. In EUR/USD, there's a couple of key spots to look for that, with prices from the long-term Fibonacci retracement at 1.1686 and 1.1748 coming in as possible areas for bears to defend. In the USD, we saw defense of 97.94 but sellers couldn't break down to fresh lows in February and that's ultimately what built the ascending triangle formation that led to breakout this week. But, in EUR/USD, sellers still have an open door - if they want to take it. - js