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EUR/USD Technical Analysis: Euro Soars to 5-Month High

EUR/USD Technical Analysis: Euro Soars to 5-Month High

Ilya Spivak,

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro breaks 5-month trend resistance, challenges 1.13 vs. US Dollar
  • Waiting for new selling opportunity after short trade triggers stop-loss

The Euro accelerated upward against the US Dollar, breaking above falling trend line restrictingmoves to the upside since early May. The break seems to imply that resumption of the recovery from December 2015 lows after a two-month pullback through late June.

From here, a daily close above the 1.1332-93 area (double top, 38.2% Fibonacci expansion) sees the next upside barrier at 1.1461, the 50% level. Alternatively, a reversal below the intersection of trend line resistance-turned-support and the 23.6% Fib at 1.1171 exposes the August 5 low at 1.1046.

A short EUR/USD position triggered at 1.1150 has been stopped out by the break through trend line resistance. The long-term trend bias continues to favor weakness but near-term momentum clearly warns against trading that view at this juncture. With that in mind, opting for the sidelines seems appropriate.

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