EURUSD: Bounce Seen as Corrective Below 1.40
I initially sold EURUSD at 1.4328. Prices dropped through our soft target at 1.3976 to stall at the bottom of a falling channel connecting major swing lows since mid-April, with a Hammer candlestick hinting a corrective upswing is ahead. I will move my stop to the break-even level (1.4328) and continue holding short, expecting the short-term move higher to offer an opportunity to add to the short position.
Prices overcome resistance at 1.3744, the 23.6% Fibonacci retracement level, exposing the next barrier at the 38.2% level (1.3898). The line in between correection and a more worrying recovery seems to be the 1.40 figure and I will seriously consider booking the position if this level is overcome on a daily closing basis.
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