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EUR/USD Technical Analysis: Marking Time at 7-Month Support

EUR/USD Technical Analysis: Marking Time at 7-Month Support

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro in digestion mode after testing seven-month trend support vs. USD
  • Proximity of “Brexit” vote argues for patience before taking on a trade

The Euro is in digestion mode after testing trend lien support that has guided the move higher against the US Dollar since early December 2015. Positioning may be sharply altered as investors price in the risk of a “Brexit” outcome a pivotal UK referendum next week.

Near-term resistance is at 1.1285, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 38.2% level at 1.1401. Alternatively, a move below horizontal pivot support at 1.1193 opens the door for at test of the 1.1098-1.1136 area (trend line, May 30 low).

The possibility that the chart setup will be materially changed by next week’s fundamental news-flow seems overwhelming. Indeed, one-week implied EUR/USD option volatility is at the highest level since May 2010 as the Brexit vote looms. Standing aside seems prudent for now.

Track short-term EUR/USD levels and patterns with the GSI indicator !

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.