EUR/USD Technical Analysis: Chart Setup Hints at Upswing
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- EUR/USD Technical Strategy: Flat
- Euro Technical Positioning Continues to Warn of Looming Upswing vs. US Dollar
- ECB Rate Decision May Trigger Bounce, Offering Short Trade Opportunity Ahead
Euro technical positioning continues to warn of an on-coming recovery against the US Dollarafter prices made a preliminary push through Rising Wedge pattern resistance. Positive RSI divergence reinforces the case for an upside scenario.
Near-term resistance is at 1.0635, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis paving the way for a test of the 1.0774-1.0818 zone marked by the 23.6% Fib retracement and the May 27 low. Alternatively, a move below the 23.6% expansion at 1.0556 will open the door for a test of the 1.0428-61 zone (March 13 low, 38.2% expansion).
The upcoming ECB monetary policy announcement may prove to be the catalyst for the upswing being foreshadowed in technical positioning. We will treat the move as corrective within the confines of the multi-year structural downtrend, looking to enter short once the recovery fizzles and a viable sell signal emerges.
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