EUR/USD Breakdown Eyeing Initial Support Targets
- EURUSD Breakdown now testing initial support targets
- Updatedtargets & invalidation levels
- Looking for trade ideas? Check out DailyFX’s 2016 4Q Projections
Chart Created Using TradingView
Broader Technical Outlook: Euro boke below a key support range yesterday at 1.1067/85- this region is defined by the 61.8% retracement of the post-Brexit advance, the 50% retracement & the lower median-line parallel extending off the December lows. The focus remains lower while below this range with broader bearish invalidation up at the monthly open at 1.1228. Interim support is being tested now at 1.1009 with a more significant support confluence eyed lower at 1.0931/37. Subsequent support objectives eyed at the 2016 open 1.0872 & 1.0776.
Notes: We’ve been tracking this setup on SB Trade Desk for the past few weeks and this near-term slope extending off the late-September highs has continued to define price action. Note that today’s decline takes the pair into confluence support at 1.1009 and the immediate risk is for a rebound off this mark before turning lower. That said, look for resistance up at the median-line / 1.12067/85 with a a break lower targeting the aforementioned support targets.
From a trading standpoint, we’ll be looking to fade euro strength while within this formation with a break below key support at 1.0930 needed to mark a more meaningful decline in the pair. A quarter of the daily average true range yields profit targets of 22-25 pips per scalp. On the data front, look for the U.S. Retail Sales & the U. of Michigan confidence survey to offer up some volatility as we head into the close of the week with Fed Chair Janet Yellen also on tap. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.
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Relevant Data Releases
Other Setups in Play:
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- GBP/JPY Faces Biggest Test of Month Long Downtrend
- U.S. Dollar Consolidation - Break in Focus Heading into October Trade
---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.