Forex: EUR/USD Technical Analysis – Short Trade Setup Sought
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- EUR/USD Technical Strategy: Flat
- Support: 1.3726 (23.6% Fib exp.), 1.3665 (38.2% Fib exp.)
- Resistance: 1.3764 (trend line), 1.3800-31 (double top), 1.3892 (Dec 27 high)
The Euro is testing support at 1.3726, the 23.6% Fibonacci expansion, after reversing from double-top resistance in the 1.3800-31 area and completing a Bearish Engulfing candlestick pattern. A push below support initially exposes the 38.2% level 1.3665. Alternatively, a move back above a falling trend line set from late October (1.3764) aims for 1.38 anew.
A short position in line with our long-term fundamental outlook looks unattractive from a risk/reward perspective with prices squarely at support. As such, we will stand aside for now, waiting for another entry point after our previous attempt to sell the pair was stopped out at breakeven.
Daily Chart - Created Using FXCM Marketscope 2.0
--- 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.