EUR/USD Technical Analysis: 5-Month Trend Support in Focus

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Talking Points:

• EUR/USD Technical Strategy: Flat
• Support: 1.0856, 1.0814, 1.0740
• Resistance: 1.0980, 1.1037, 1.1128

The Euro is attempting a tepid recovery from five-month trend line support following an expected downswing against the US Dollar. A daily close below the 1.0856-88 area (trend line, 38.2% Fibonacci expansion) exposes the 1.0814-18 zone (50% level, May 27 low). Alternatively, a move above the 23.6% Fib at 1.0980 opens the door for a challenge of the 14.6% expansion at 1.1037.

Prices are too close to support to justify entering short in line with our long-term outlook from a risk/reward perspective. With that in mind, we will continue to stand aside until a more attractive opportunity presents itself.

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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com