EUR/USD Technical Analysis: Holding Short Through Bounce
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- EUR/USD Technical Strategy: Short at 1.3644
- Support: 1.3386, 1.3332, 1.3309
- Resistance:1.3419, 1.3472, 1.3516
The Euro fell as expected against the US Dollar after prices put in a bearish Evening Star candlestick pattern. The appearance of a Hammer candle with positive RSI divergence marked the start of a bounce as we suspected. A daily close above the 23.6% Fibonacci retracement at 1.3419 exposes 1.3472, the intersection of the 38.2% level and a falling channel top. Alternatively, a turn below the 14.6% Fib at 1.3386 targets the August 6 low at 1.3332.
We sold EURUSD at 1.3644 in line with our long-term fundamental outlook and have since booked profit on half of the position. The stop-loss on our remaining exposure has been moved to the breakeven level.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com