EUR/USD Technical Analysis: Looking to Sell Below 1.14
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- EUR/USD Technical Strategy: Pending short at 1.1390
- Euro breaks trend line support, hinting dominant down trend may be resuming
- Looking to corrective upswing to enter short with improved risk/reward setting
The Euro is attempting a cautious recovery having found support above the 1.12 figure against the US Dollar after prices fell to the lowest level in two weeks. Still, a break of rising trend line support set from the March swing low hints the long-term down trend may be resuming.
Near-term resistance is at 1.1372, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 1.1457-65 area (23.6% level, April 12 high). Alternatively, a drop below the 23.6% Fib retracement at 1.1241 paves the way for a test of the 38.2% threshold at 1.1103.
We are keen to sell EUR/USD in line with our 2016 fundamental forecast but current levels do not offer an attractive price from a risk/reward perspective. With that in mind, we will set up an entry order to enter short at 1.1390. If triggered, the trade will target 1.1241 with a stop-loss activated on a daily close above 1.1465.
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