EUR/USD Technical Analysis: Euro Rallies Most in 7 Months
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- EUR/USD Technical Strategy: Flat
- Euro gains most in 7 months vs. US Dollar, making good on reversal cues
- Looking to re-enter short when signs of long-term trend resumption appear
The Euro turned higher against the US Dollar as expected after prices found support below the 1.11 figure, with the surge catalyzed by disappointing US jobs data. Prices have now invalidated the series of lower highs and lows carved out since early May, warning that the near-term bias has been altered.
Near-term resistance is at 1.1401, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a challenge of the 50% level at 1.1495. Alternatively, a reversal below the 23.6% Fib at 1.1285 sees the next downside barrier at 1.1214, the 14.6% expansion.
A EUR/USD short trade was triggered at 1.1317 and subsequently met its initial objective, leading to partial profits being taken. The rest of exposure was closed at breakeven as the Euro recovered. The long-term trend continues to look bearish, arguing for a flat posture until a new selling opportunity emerges.
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