Forex: EUR/USD Technical Analysis – Looking to Sell on Bounce
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- EUR/USD Technical Strategy: Pending Short
- Support: 1.3671-1.3709 (channel floor, 38.2% Fib ret.), 1.3630 (50% Fib ret.)
- Resistance: 1.3822 (channel top)
The Euro fell against the US Dollar as expected and we continue to monitor price action for an opportunity to enter short based on our long-term fundamental outlook. Risk/reward considerations argue against taking a trade as prices test support in the 1.3671-1.3709 area, marked by the 38.2% Fibonacci retracement and a falling channel floor. A break downward on a daily closing basis initially exposes the 50% level at 1.3630. Alternatively, a bounce upward sees the first layer of significant resistance at the channel top (1.3822). We will continue to wait on the sidelines for now, ideally looking for a bounce from current levels to offer a more attractive entry point.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com