EUR/USD Technical Analysis: Looking to Sell into Euro Surge
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- EUR/USD Technical Strategy: Flat
- Euro surges toward 1.12 figure, yielding largest daily rally in 3 months
- Waiting for new selling opportunity in line with long-term down trend
The Euro raced sharply higher against the US Dollar following the ECB monetary policy announcement, putting in the largest daily advance in three months. Prices may now make their way above the 1.12 figure, although fundamental forces behind the rally seem suspect.
From here, a break above the 50% Fibonacci expansion at 1.1252 opens the door for a test of the 1.1353-76 area, marked by the 61.8% level and the February 11 high. Alternatively, a breach of the 38.2% Fib at 1.1151 on a daily closing basis sees the next downside barrier at 1.1025, the 23.6% expansion.
We expect the long-term EUR/USD down trend to continue, in line with our 2016 fundamental forecast. With that said, current positioning does not offer an actionable trading opportunity. Furthermore, price action is likely to be jittery as markets digest recent volatility. We will stand aside for now.
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