Forex: EUR/USD Technical Analysis – Stalling at Channel Top
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- EUR/USD Technical Strategy: Flat
- Support: 1.3800-31 (former resistance, channel floor), 1.3680 (23.6% Fib ret.)
- Resistance: 1.3960 (23.6% Fib exp.), 1.4000 (channel top)
Euro price action has turned quiet against the US Dollar, with prices stalling below resistance at the top of a rising channel set from early February. Negative RSI divergence hints at fading upside momentum and warns a reversal lower may be ahead. Breaking support in the 1.3800-31 area, marked by a former double top and the channel bottom, exposes the 23.6% Fibonacci retracement at 1.3680. Alternatively, a move above the 23.6% Fib expansion at 1.3960 aims for the channel top at 1.4000.
Our big-picture fundamental outlook continues to favor Euro weakness but we will continue to stand aside absent a defined sell signal, preferring to see a close below the channel floor to enter a short position.
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.