EUR/USD Technical Analysis: Euro Surge a Selling Opportunity
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- EUR/USD Technical Strategy: Flat
- Euro Makes Good on Bullish Chart Setup, Posts Largest Daily Gain in Seven Years
- Advance Seen as Corrective and Will Be Treated as Pending Selling Opportunity
The Euro raced higher against the US Dollar as expected, making good on bullish technical cues and producing the largest daily advance in over six years. The move was triggered after the ECB monetary policy announcement fell short of the markets’ dovish expectations, as we suspected might happen.
From here, prices look poised to challenge the 50% Fibonacci retracement at 1.1007, with a break above that on a daily closing basis opening the door for a challenge of the 61.8% level at 1.1122. Alternatively, a move back below the 38.2% Fib at 1.0892 sees the next layer of support at 1.0818, the May 27 low, followed by the 23.6% retracement at 1.0750.
While the EUR/USD rally is certainly impressive, the dominant trend continues to favor the downside on a medium- and long-term basis. With that in mind, we will look to the advance as a pending opportunity to enter short once upside momentum fizzles and a compelling reversal signal presents itself. In the meantime, we remain flat.
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