Forex: EUR/USD Technical Analysis – Rally Stalls Near 1.39 Mark
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- EUR/USD Technical Strategy: Flat
- Support: 1.3800-31 (former resistance), 1.3755 (channel bottom)
- Resistance: 1.3892-1.3911 (Dec 27 high, 38.2% Fib exp.), 1.4045 (50% Fib exp.)
The Euro may be laying the groundwork for another push lower against the US Dollar. Prices show a Shooting Star and Doji candlesticks below resistance in the 1.3892-1.3911 area, marked by the December 27 high and the 38.2% Fibonacci expansion. The barrier is further reinforced by a rising channel top. Support is in the 1.3800-31 area, a former double top, with a drop back through that eyeing the channel bottom at 1.3755. Alternatively a break above resistance targets the 50% Fib at 1.4045.
Our long-term fundamental outlook favors the downside but a Shooting Star is not a concrete-enough signal to enter short. We will wait for confirmation on a daily close below the channel bottom to initiate the trade.
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.