EUR/USD Technical Analysis – Rally Has Room to Continue
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- EUR/USD Technical Strategy: Pending Short
- Support: 1.3830 (23.6% Fib exp.), 1.3793 (channel top)
- Resistance: 1.3928 (38.2% Fib exp.), 1.4007 (50% Fib exp.)
The Euro continued to push higher against the US Dollar as expected after prices broke above resistance at the top of a falling channel set from mid-March. The pair is now positioned to test the 38.2% Fibonacci expansion at 1.3928, with a daily close above this barrier exposing the 50% level at 1.4007. Alternatively, a reversal below the 23.6% Fib at 1.3830 targets the channel top, now recast as support, at 1.3793.
We remain sidelined for the time being as near-term technical positioning continues to conflict with our bearish long-term fundamental outlook for the Euro. Overall positioning since late October 2013 has traced out a Rising Wedge, a setup hinting at a looming reversal downward, and we will wait for prices to yield a palatable selling opportunity.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com