Forex: EUR/USD Technical Analysis – Short Trade Setup Sought
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- EUR/USD Technical Strategy: Pending Short
- Support: 1.3709 (38.2% Fib ret.), 1.3681 (channel floor)
- Resistance: 1.3830 (channel top)
The Euro declined as expected against the US Dollar and we are looking for an actionable short trade setup in line with our long-term fundamental outlook. Close proximity to near-term support at 1.3709, the 38.2% Fibonacci retracement, argues against entering short at current levels from a risk/reward perspective. Furthermore, it seems tactically prudent to wait before taking new directional bets on the greenback until after the release of the pivotal Nonfarm Payrolls data due in the hours ahead.
A break below support on a daily closing basis initially exposes the channel bottom, now at 1.3681. Alternatively, a bounce aims for the first layer of significant resistance at the channel top (1.3830).
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com