Strategy: Pending Short
As we initially suggested in early July, EURUSD found a top near 1.3266, with prices reversing sharply lower after showing a bearish Dark Cloud Cover candlestick pattern to take out support at the bottom of a near-term rising channel to pause at 1.2779, the 38.2% Fibonacci retracement of the 6/7-8/6 rally. The magnitude of the reversal has made entering short at current levels unattractive from a risk/reward perspective and we will look for a corrective pullback to yield a selling opportunity. Near-term resistance lines up at 1.2992, the 23.6% Fib, with a move above that exposing the 14.6% level at 1.3124.
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