Euro Weekly Technical Outlook: EUR/USD May Dip More Before Finding Support
EUR/USD Technical Outlook
- EUR/USD still at risk of trading lower in the near-term
- Further weakness will bring May trend-line into focus
- Overall, bias is neutral to negative at the moment
EUR/USD may trade soft in the near-term
The Euro remains vulnerable in the near-term versus the Dollar as price action remains generally soft. A breakdown though could position EUR/USD to hold the May trend-line and turn higher later on. This would be consistent with the broader trend since the spring.
For now, a small bear-flag may form on the 4-hr chart that presents a set-up for those looking to take bearish bets. The May trend-line isn’t that far away, lying not too far away from the recent 12053 low, but nevertheless for the short-term minded trader there is still some room.
Of course the pattern may never come to fruition and the recent grind higher could continue or even accelerate. If this is the case, from a pure technical standpoint, fresh longs won’t hold appeal from a risk/reward standpoint. A drop down to the May trend-line and subsequent rejection could offer the better set-up from the long-side.
Overall, the near-term outlook is neutral to bearish until we have further indications from price action in the days ahead.
EUR/USD Daily Chart (watch for weakness to May trend-line)
EUR/USD 4-hr Chart (small bear-flag may form)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.