Forex Strategy: Short EUR/USD Trade Pending
The Euro slumped to the lowest level in a month against the US Dollar, breaking trend line support and hinting a double top is set below 1.40. Sellers are aiming to challenge the 50% Fibonacci retracement at 1.3734, with a break below that exposing the 1.3673-81 area marked by the 61.8% level and the bottom of a Rising Wedge formation. Alternatively, a reversal above the 1.3795-1.3810 region (38.2% Fib, trend line), targets the double top at 1.3932.
Prices are too close to support to justify entering short in line with my long-term fundamental outlook from a risk/reward perspective. I will remain flat for now, waiting for a short trade setup to emerge.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.