Forex: EUR/USD Technical Analysis – Euro Hits Two-Month High
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- EUR/USD Technical Strategy: Flat
- Support: 1.3800-31 (former resistance), 1.3733 (channel bottom)
- Resistance: 1.3892-1.3911 (Dec 27 high, 38.2% Fib exp.), 1.4045 (50% Fib exp.)
The Euro advanced after a status-quo ECB policy announcement as expected, hitting a two-month high against the US Dollar. The bulls now aim to challenge the 1.3892-1.3911 region, marked by the December 27 high and the 38.2% Fibonacci expansion. A break above this boundary targets the 50% Fib at 1.4045. Alternatively, a turn back below the 1.38 figure aims for rising channel support at 1.3733.
Prices are too close to relevant resistance to justify a long position from a risk/reward perspective. On the other hand, a short trade in line with our long-term fundamental outlook looks premature absent a clear-cut reversal signal. As such, we will stand aside for now 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.