EUR/USD Technical Analysis: Holding Short Through Upswing
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- EUR/USD Technical Strategy: Short at 1.1037
- Euro finds interim support, posts largest daily advance in a month vs. US Dollar
- Holding short position, expecting down trend to resume after corrective bounce
The Euro mounted a sharp recovery against the US Dollar, producing the largest daily advance in close to a month. The near-term down trend established in early February remains intact however, painting gains as corrective (at least for the time being).
A daily close above 1.0956 – the intersection of trend line support-turned-resistance and the 23.6% Fibonacci retracement – opens the door for a test of the 38.2% level at 1.1036. Alternatively, a reversal below the 38.2% Fib expansion at 1.0908 paves the way for a challenge of the 50% threshold at 1.0859.
We sold EUR/USD at 1.1037 and subsequently booked profit on half of the position after the trade hit its first objective. We will continue holding short here, looking for the dominant down trend to resume. The stop-loss has been adjusted to the breakeven level.
Has the Euro matched DailyFX expectations so far in 2016? See our Q1 forecast to find out!