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- EUR/USD Technical Strategy: Pending Short
- Support: 1.3830 (23.6% Fib exp.), 1.3800 (channel top)
- Resistance: 1.3928 (38.2% Fib exp.), 1.4007 (50% Fib exp.)
The Euro looks poised to extend its recovery against the US Dollar after prices cleared resistance at the top of a falling channel set from mid-March. Buyers now aim to challenge the 38.2% Fibonacci expansion at 1.3928, with a break above that targeting the 50% level at 1.4007. Alternatively, a turn below the 23.6% Fib at 1.3830 eyes channel top resistance-turned-support at 1.3800.
Our long-term fundamental outlook continues to favor a weaker Euro, but near-term technical positioning clearly conflicts with that view. As such, we will continue to stand aside, waiting for the upswing to run its course and produce a short trade setup in the days ahead.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com