EUR/USD Technical Analysis – Wedge Break Hints at Weakness
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- EUR/USD Technical Strategy: Pending Short
- Support: 1.3673 (61.8% Fib exp.), 1.3598 (76.4% Fib exp.)
- Resistance: 1.3705 (wedge floor), 1.3734 (50% Fib exp.)
The Euro may be readying to accelerate downward after prices cleared support at the bottom of a Rising Wedge chart formation traced out since late October. Sellers are testing support at 1.3673, marked by the 61.8% Fibonacci retracement, with a break below that exposing the 76.4% level at 1.3598. Alternatively, a move back above the Wedge floor (now at 1.3705) aims for the 50% Fib at 1.3734.
We have been waiting to sell the Euro in line with our long-term fundamental outlook and the Wedge break is a promising step in that direction but sitting right on Fib support makes the trade unattractive from a risk/reward perspective. We will begrudgingly stand aside 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.