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Talking Points:
- EUR/USD Technical Strategy: Pending Short
- Support: 1.3734 (50% Fib ret.), 1.3673-81 (61.8% Fib ret., wedge bottom)
- Resistance: 1.3795-1.3814 (38.2% Fib ret., trend line), 1.3932 (double top)
The Euro paused to digest losses after sinking to the weakest level in a month against the US Dollar having found resistance below 1.40. Near-term support is at 1.3734, the 50% Fibonacci retracement. A daily close below this barrier exposes the 1.3673-84 region, marked by the 61.8% level and the bottom of a Rising Wedge formation. Alternatively, a turn above the 1.3795-1.3814 area (38.2% Fib, trend line) targets double top resistance at 1.3932.
Risk/reward considerations argue against entering short in line with our long-term fundamental outlook as the pair rests in close proximity to near-term support. We will remain flat, waiting for an actionable short trade setup to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
