EUR/USD Technical Analysis: Trend Line Resistance Held
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- EUR/USD Technical Strategy: Pending short at 1.1150
- Euro recoils from 3-month trend resistance, hints down trend resuming
- Short entry order established to capture acceptable risk/reward setup
The Euro may be readying to turn lower anew against the US Dollar after prices recoiled from resistance at a falling trend line capping gains since early May. Prices put in a Bearish Engulfing candlestick pattern to mark a would-be top above the 1.12 figure but follow-through has been lacking thus far.
Near-term support is at 1.1067, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis paving the way for a test of the 38.2% level at 1.0965. Alternatively, a reversal above the trend line and the August 2 high at 1.1234 opens the door for a challenge of double top resistance at 1.1393.
A short position seems compelling but prices are a bit too low to justify pulling the trigger from a risk/reward perspective. With that in mind, an entry order to sell the pair at 1.1150 has been established. If triggered, the trade will initially target 1.1067 and carry a stop-loss activated on a daily close above 1.1192.
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