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EUR/USD Technical Analysis: Bounce May Yield Short Trade

EUR/USD Technical Analysis: Bounce May Yield Short Trade

2015-11-06 09:26:00
Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Down Move Pauses as Euro Consolidates Losses Having Slid to 3-Month Low
  • Looking to Sell After Correction as RSI Divergence Hints at Rebound Ahead

The Euro paused to digest losses against the US Dollar after prices dropped to the lowest level in over three months as traders await US employment data for direction cues. Positive RSI divergence points to ebbing downside momentum and hints a bounce may be ahead.

A daily close below support in the 1.0818-44 area, marked by a support shelf in play since May and the 38.2% Fibonacci expansion opens the door for a test of the 50% level at 1.0774. Alternatively, a push above the 14.6% Fib retracement at 1.0930 clears the way for a challenge of the 23.6% threshold at 1.0989.

The overall EUR/USD trend continues to look bearish. With that in mind, we will treat any upswing from here as corrective and look for the move to offer a selling opportunity in the day ahead after bullish momentum is exhausted. In the meantime, we remain flat.

Losing Money Trading Forex? This Might Be Why.

EUR/USD Technical Analysis: Bounce May Yield Short Trade

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.