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EUR/USD Technical Analysis: Euro Still Locked in Narrow Range

EUR/USD Technical Analysis: Euro Still Locked in Narrow Range

Ilya Spivak,

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Talking Points:

  • EUR/USD Technical Strategy: Short at 1.1207
  • Euro continues to oscillate in narrow range above 1.12 versus US Dollar
  • Opting to keep short trade in play despite lackluster near-term progress

The Euro is locked in a narrow range above the 1.12 figure against the US Dollar having rebounded as expected after putting in a bullish Morning Star candlestick pattern. Indecision has persisted despite a neutral ECB monetary policy announcement as well as deteriorating Fed rate hike bets.

A daily close below the 23.6% Fibonacci expansion at 1.1200 opens the door for a test of the 1.1097-1.1123 area (August 31 low, 38.2% level). Alternatively, a reversal above the 14.6% Fib at 1.1263 paves the way for a retest of the August 18 high at 1.1366, a barrier reinforced by a double top at 1.1415.

A short EUR/USD position was activated at 1.1207. Prices’ inability to sustain upside momentum despite recent news-flow hints at deep-seeded Euro weakness awaiting a catalyst to reassert itself. With that in mind, the trade will remain in play for now despite lackluster near-term progress.

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