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EUR/USD Technical Analysis: Bounce Hinted Near 1.06

EUR/USD Technical Analysis: Bounce Hinted Near 1.06

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro Stalling Above 1.06 Figure vs. US Dollar, RSI Divergence Hints at Rebound Ahead
  • Waiting for Corrective Recovery to Enter Short Trade in Line with Long-Term Down Trend

The Euro continues to stall above the 1.06 figure against the US Dollar as markets struggle for directional conviction in thinning pre-holiday trade. Positive RSI divergence still points to ebbing downside momentum and hints that a recovery may be brewing ahead.

Near-term support is at 1.0556, the 23.6% Fibonacci expansion. A break below that on a daily closing basis clears a path to test the 1.0428-61 area, marked by the March 13 low and the 38.2% level. Alternatively, a reversal above the 14.6% Fib retracement at 1.0702 opens the door for a challenge of the 1.0785-1.0818 zone (23.6% retracement, May 27 low).

The dominant EUR/USD trend continues to look bearish. With that in mind, we will treat any upswing from here as corrective within the context a longer-term decline and use it as an opportunity to find selling opportunities. In the meantime, we remain on the sidelines.

Losing Money Trading Forex? This Might Be Why.

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