EUR/USD Technical Analysis: Short Position Now in Play
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- EUR/USD Technical Strategy: Short at 1.0747
- Break of Head and Shoulders Pattern Neckline Hints Move Toward 1.06 Mark Ahead
- Short Position Triggered, Stop-Loss Established Above 1.08 Figure versus US Dollar
The Euro looks to have completed a bearish Head and Shoulders chart formation below the 1.11 figure against the US Dollar, hinting a top is in place. The setup’s measured downside objective implies a move toward the 1.06 threshold from here.
Near-term support is at 1.0602, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 1.0461-1.0517 area bracketed by the 50% level and the December 3 low. Alternatively, a reversal back above the 1.0777-1.0818 zone (23.6% Fib, horizontal support-turned-resistance) clears the way for a test of the December 15 high at 1.1060.
We have now entered short EUR/USD at 1.0747, initially targeting 1.0603 (a margin of one pip above near-term support accounting for the bid/ask spread has been included). A stop-loss will be activated on a daily close above 1.0818. We will take profit on half of the trade and move the stop-loss to breakeven once the first objective is reached.
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