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EUR/USD Technical Analysis: Euro Breaks Key Channel Top

EUR/USD Technical Analysis: Euro Breaks Key Channel Top

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro Breaks Channel Resistance, Hinting at Continued Gains vs. US Dollar
  • Looking for New Short Trade Setup After Corrective Upswing is Exhausted

The Euro broke resistance capping gains against the US Dollar since mid-December, hinting that a larger upward correction is in the cards ahead. The larger multi-year trend continues to look bearish however, painting on-coming gains as corrective.

A daily close above the 38.2% Fibonacci retracement at 1.0976 opens the door for a challenge of the 50%level at 1.1117. Alternatively, a turn back below falling channel top resistance-turned-support at 1.0887 paves the way for a challenge of the January 21 low at 1.0778.

We sold EUR/USD at 1.0921 and subsequently booked profits on half of the position after prices hit the trade’s initial objective. The second half of the position has now been stopped out at the breakeven level. From here, we will remain on the sidelines until another selling opportunity presents itself.

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