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- EUR/USD Technical Strategy: Flat
- Euro gains most in nearly 3 months, breaks near-term down trend
- Booking remaining short exposure but aiming to re-establish later
The Euro turned higher against the US Dollar as expected after finding support having hit a seven-month low below the 1.09 figure. Prices broke the series of lower highs and lows initiated in late September, implying near-term trend reversal. The longer-term bias continues to appear bearish however.
Near-term resistance is now at 1.1048, the 38.2% Fibonacci retracement. A break above that on a daily closing basis opens the door for a test of the 1.1109-23 area (50% level, August 31 low). Alternatively, a move back below the 23.6% Fib at 1.0973 sees the next downside barrier at 1.0926, the 14.6% retracement.
A short EUR/USD position was triggered at 1.1207 and partial profit taken after the trade satisfied its first objective. Remaining exposure will now be unwound amid signs of a larger correction ahead. Signs up bullish exhaustion will be sought to re-enter short in the days ahead.
Where is the Euro heading in the fourth quarter? See our forecast to find out!