Dollar's breakdown, Euro's bounce - Exactly as forecasted; Now what?

The U.S. dollar just delivered the clean follow-through we flagged on Sunday, while EURUSD respected its bullish structure to the pip.

Today is all about whether momentum continues or whether markets try a Monday fake-out. 

USD Index (DX.F) 

In yesterday’s Lab Note #50, we wrote the following: 

“Resistance cluster: 98.40-98.60 (50% Fibo + prior highs + upper wedge)

Support: 97.90-98.00

Notes: Strong confluence overhead, which increases the probability of correction.” 

What happened earlier today?

Exactly what we warned. 

The USD Index failed to break above the mentioned resistances, which translated into a reversal and a breakdown under the lower wedge line, triggering the bearish scenario we highlighted. Today’s low? 97.88 (slightly below yesterday’s support zone).

Huge congrats to anyone who took that move - absolutely textbook setup. 

What now? 

Sell signals on H4 remain active. Therefore, as long as DX.F stays below the broken wedge line (no clean invalidation), downside pressure stays dominant. In other words, a second leg lower is on the table unless bulls return fast and decisively and defend the 97.90-98.00 floor.

If they fail? We could see a potential re-test of recent lows and the broader support area we discussed in Lab Note #46.

EUR/USD 

Let’s start with yesterday’s key levels:

“Resistance: 1.1750-1.1763

Support: 1.1683 → if broken: 1.1616-1.1626

Notes: Holding above previously broken upper line of the black channel = bullish; closing back below = deeper correction risk.” 

What happened?

Bulls held the upper channel line perfectly, which triggered the bounce (we expected) straight into the marked resistance. Another clean reaction, another spot-on forecast. And again, props to anyone who rode that move. 

What now? 

As long as EURUSD stays above the black channel, pressure remains alive: 

•             First target: upper border of the orange consolidation 

•             If today closes above it, we’ll likely see bullish continuation into 1.1800, 

•             Or even possibly deeper into the 1.1816-1.1820 red resistance zone.

If the bulls lose the channel?

Momentum flips quickly, and correction risk returns immediately.

Lab takeaway - What traders should focus on today? 

1. DX.F is still vulnerable. As long as we’re below the broken wedge -> sellers are in control. Don’t fade this unless we get a real bullish invalidation. 

2. EURUSD still has upside room -> but only while the channel holds. Losing the channel flips the picture. Staying above it opens the door to a fresh run at 1.1800+. 

3. Today is all about confirmation. Both the dollar and euro hit their first targets and now traders should watch structure, not noise:

- Is DX.F defending support, or slipping below?
- Is EURUSD respecting the channel, or closing under it?

4. If you traded yesterday’s roadmap -> great job. If you didn’t -> today is the day to track continuation vs. reversal.

The cleanest setups this week will come after today’s confirmation moves.