EUR/USD Technical Analysis: Waiting for Selling Opportunity
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- EUR/USD Technical Strategy: Flat
- Euro in Digestion Mode After Dropping Most in 2 Weeks to Hit 6-Month Low vs. US Dollar
- Short Position Favored But Risk/Reward Considerations Argue Against a Trade for Now
The Euro stalled as prices digested losses after dropping to the lowest level in over six months against the US Dollar in the wake of an impressively strong US jobs report. The decline marked the largest daily drop in two weeks for the single currency.
Near-term support is at 1.0704, the 61.8% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 76.4% level at 1.0616. Alternatively a move back above the 50% Fib at 1.0774 clears the way for a test of the 1.0818-44 area, marked by double bottom support-turned-resistance and the 38.2% expansion.
We remain interested in a short position in line with the dominant down trend. Current positioning does not offer an attractive opportunity to place a trade however. At 70 pips, the available trading range is too narrow to justify entering a position from a risk/reward perspective (given ATR at 102 pips). With that in mind, we will remain flat for now.
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