EUR/USD Technical Analysis: Top in Place Below 1.15 Figure?
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- EUR/USD Technical Strategy: Flat
- Candlestick Pattern Hints Euro Down Move May Be Brewing Ahead
- Risk/Reward Considerations Argue Against Taking Short Position
The Euro put in a bearish Dark Cloud Cover candlestick pattern, hinting a larger downward reversal against US Dollar may be ahead. Prices launched aggressively higher in the aftermath of last week’s FOMC monetary policy announcement – rising the most in three weeks – but have since erased nearly all of the advance after finding resistance above the 1.14 figure.
Near-term support is now at 1.1220, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis opens the door for a challenge the 50% level at 1.1146. Alternatively, a move back above the 23.6% Fib at 1.1311 clears the way for a test of the 14.6% expansion at 1.1368.
Risk/reward considerations argue against taking a trade at current levels. At 99 pips, the available trading range is smaller than 20-day ATR, which suggests prices are wedged too closely between near-term support and resistance to make for a workable setup. We will remain on the sidelines for now.
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