EUR/USD Classical Technical Report
EUR/USD: Setbacks have stalled for now after just taking out some critical support by the 1.4155 lows from 18Apr. At this point, it is difficult to determine whether the market will look to consolidate the latest intense declines and possibly bounce a bit back towards the 1.4500 area, or will continue to decline and accelerate below 1.4155 to officially signal a shift in the medium-term structure in favor of the USD. Either way, the strategy from here should be to look to sell, with any rallies now seen well capped in the 1.4500 area, as the break below 1.4155 is significant, ending a sequence of consecutive higher lows in 2011. In the interim, we remain sidelined and await a clearer signal.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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