Forex: EUR/USD Technical Analysis – Waiting to Enter Short Trade
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- EUR/USD Technical Strategy: Flat
- Support: 1.3800-31 (former resistance, channel floor), 1.3680 (23.6% Fib ret.)
- Resistance: 1.3892-1.3911 (Dec 27 high, 38.2% Fib exp.), 1.3979 (channel top)
Euro technical positioning continues to hint the currency may be topping out against the US Dollar after prices showed a bearish Dark Cloud Cover candlestick pattern at resistance in the 1.3892-1.3911 area, marked by the December 27 high and the 38.2% Fibonacci expansion. Breaking below support in the 1.3800-31 region initially exposes 1.3680, the 23.6% Fib retracement. A push above 1.3911 targets a rising channel top at 1.3979. Our long-term fundamental outlook favors Euro weakness but we will opt to wait for confirmation on a daily close below channel support before triggering a short position.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com