Forex: EUR/USD Technical Analysis – Support Met Above 1.37 Level
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- EUR/USD Technical Strategy: Pending Short
- Support: 1.3721 (50% Fib ret.), 1.3663 (61.8% Fib ret.)
- Resistance: 1.3779 (38.2% Fib ret.), 1.3825 (channel bottom)
The Euro fell against the US Dollar as expected, dropping through rising channel support set from early February and clearing the 38.2% Fibonacci retracement at 1.3779. Sellers are now testing the 50% level at 1.3721, with a break below that eyeing the 61.8% Fib at 1.3663.Alternatively, a move back above 1.3779 aims for channel bottom support-turned-resistance at 1.3825.
Entering short in line with our long-term fundamental outlook appears unattractive from a risk/reward perspective however: the near-term trading range is a mere 58 pips while 20-day ATR is at 75 pips, warning of an undue skew in risk/reward parameters when using a stop-loss activated on a daily closing basis (as is the case with our strategy). We will remain on the sidelines for now.
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.