EUR/USD Candlestick Analysis: Waiting for Corrective Bounce
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- EUR/USD Strategy: Flat
- RSI Divergence Warns of Upswing Ahead
- Bounce Seen as Opportunity to Enter Short
The Euro continue to tread water against the US Dollar but positive RSI divergence hints at ebbing downside momentum and warns that a bounce may be ahead. The first layer of weekly resistance lines up at 1.1519, the 14.6% Fibonacci retracement, with a break above that exposing the 23.6% level at 1.1780. Near-term support is at 1.1096, the January low.
On balance, any on-coming gains are likely to be corrective, both in the context of the structural down trend established in April 2008 as well as our fundamental outlook. As such, we will treat a bounce as an opportunity to enter short after the move peters out rather than a discrete long position.
Weekly Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.