EUR/USD: The Floor Broke, but It Was a Bear Trap. Now the 1.1281 Test
On US CPI day EUR/USD stabbed to 1.1110, a 17-month low, but never closed a day below the 1.1150 floor. It snapped back to 1.1269 on Friday. The levels that matter this week: a daily close above 1.1281 targets 1.1300 and 1.1361; a daily close below 1.1150 cancels the idea.
Post-close market review. Educational content; it describes levels on the chart, not a recommendation to trade. The 4-hour path on the chart is reconstructed from reported levels.
Last week: the floor at 1.1150
Last week we watched the 1.1150 floor, tested three times, and the first target below it at 1.1105. On Wednesday 14 October, the day of the hotter-than-expected US CPI report, EUR/USD broke below the floor and reached 1.1110, a 17-month low, 5 pips from that target.
Then it reversed. The pair never closed a day below 1.1150: buyers defended the floor every time. It snapped back, broke through the line of lower highs and reached 1.1269 on Friday.
Why it was a bear trap
A bear trap is a break below support that does not hold. Sellers who sell the break are caught when price comes straight back above the level. Here the break lasted a few hours, and the wick to 1.1110 did not turn into a daily close below 1.1150.
What the chart shows now (4-hour)
- The lower-highs line is broken. The downtrend line from early October no longer caps the price.
- French unrest is pulling the pair back from Friday's 1.1269 high.
- The real test is the falling 21-day average at about 1.1281. It is still sloping down, so the bigger trend is still down.
Levels on the chart
| Level | What it is |
|---|---|
| 1.1361 | target 2 |
| 1.1300 | target 1 |
| 1.1281 | falling 21-day average: the trigger on a daily close above it |
| 1.1269 | Friday's high, the break of the lower highs |
| 1.1150 | the floor: the idea is invalid on a daily close below it |
| 1.1110 | the CPI-day wick, the bear trap |
The plan, in three lines
- Trigger: a daily close above 1.1281 → 1.1300, then 1.1361.
- Invalid: a daily close below 1.1150.
- Until 1.1281 breaks, this is a tactical bounce inside a downtrend.
This week
- Friday: flash PMIs for the eurozone and the US (eurozone composite forecast 52.5, previous 53.1). This is the main event of the week.
- All week: French unrest and the 2027 budget.
- Fed blackout: no Fed speakers ahead of the 28 October decision; the market prices the odds of a rate hike under 15 %.
- Next week: the Fed (28 October) and the ECB (29 October).
The lesson
Wait for the close, not the wick. The wick to 1.1110 looked like a breakdown, and it trapped anyone who sold late. A level only breaks when the market closes beyond it.
Forex involves significant risk of loss. Educational content, not financial advice.