EUR/USD Technical Analysis: Pivotal Trend Line in Focus
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- EUR/USD Technical Strategy: Flat
- Euro working on fifth consecutive daily advance for longest rally in five months
- Waiting to re-enter short position in line with dominant long-term down trend
The Euro is trying to extend its recovery against the US Dollar for a fifth consecutive day, making for the longest winning streak in five months. Prices are now testing resistance defining whether the latest upswing represents a correction in the context of a near-term down trend or a larger advance.
Near-term resistance is at 1.1036, marked by the 38.2% Fibonacci retracement and reinforced by rising trend line support-turned-resistance. A break above this barrier on a daily closing basis sees the next upside threshold at 1.1101, the 50% level. Alternatively, a move below the 23.6% Fib at 1.0956 paves the way for a test of the 14.6% expansion at 1.0906.
We sold EUR/USD at 1.1037 and subsequently booked profit on half of the position after the trade hit its first objective. The remainder of the position was stopped out at breakeven late last week. We will move to the sidelines from here, waiting for another opportunity to sell in line with our 2016 outlook.
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