EUR/USD Technical Analysis: Euro Drops Most in 3 Weeks
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- EUR/USD Technical Strategy: Flat
- Euro drops most in 3 weeks after finding resistance above 1.16 figure
- Adverse risk/reward setup, looming event risk warn against short trade
The Euro turned lower against the US Dollar as expected, with prices producing the largest daily decline in three weeks. The move lower followed the appearance of a Shooting Star candlestick pattern after the pair found resistance above the 1.16 figure.
From here, a daily close below the 23.6% Fibonacci retracement at 1.1357 opens the door for a challenge of the 38.2% level at 1.1196. Alternatively, a reversal back above support-turned-resistance at 1.1456, the 14.6% Fib, paves the way for a test of the May 3 high at 1.1616.
Prices are too close to near-term support to justify entering short from a risk/reward perspective. Furthermore, on-coming US jobs data represents pivotal event risk that may materially alter technical positioning. With that in mind, we will remain on the sidelines for the time being.
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