EUR/USD Technical Analysis: Euro Drops to Two-Week Low
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- EUR/USD Technical Strategy: Flat
- Euro Drops to Two-Week Low vs. US Dollar Amid Fed Rate Hike Aftermath
- Risk/Reward, Tactical Considerations Argue Against Taking Short Position
The Euro is facing swelling selling pressure against the US Dollar in the aftermath of the FOMC monetary policy announcement, with prices dropping to a two-week low. The pair topped below the 1.11 figure having rebounded following the ECB rate decision.
Near-term support is in the 1.0777-1.0818 area, marked by the 23.6% Fibonacci expansion and the May 27 low. A daily close below this barrier paves the way for a test of the 38.2% level at 1.0602. Alternatively, a move back above support-turned-resistance at 1.0938 opens the door for a challenge of the December 15 high at 1.1060.
We are keen to enter short EUR/USD in line with the long-term down trend. Prices are too close to near-term support to justify the trade from a risk/reward perspective. Furthermore, the single currency may yet bounce on the back of risk aversion as the Fed begins to implement its new policy regime. With that in mind, we will remain flat for now.
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