EUR/USD Technical Analysis: Euro Back on the Defensive
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- EUR/USD Technical Strategy: Flat
- Euro edges lower after prices produce Bearish Engulfing candle pattern
- Risk/reward considerations argue against entering short trade for now
The Euro finds itself on the defensive once again having found resistance above the 1.12 figure against the US Dollar. Prices moved lower after the pair produced a Bearish Engulfing candlestick pattern, hinting at the formation of a near-term top.
From here, a daily close below the 23.6% Fibonacci expansion at 1.1067 opens the door for a challenge of the 38.2% level at 1.0965. Alternatively, a move back above the 14.6% Fib at 1.1131 paves the way for a rest of the August 2 high at 1.1234.
An attractive trade setup seems to be absent for now. Risk/reward considerations argue against entering short as prices sit squarely at near-term support. Furthermore, the immediately available trading range seems too narrow relative to ATR-implied volatility readings.
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