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EUR/USD Technical Analysis: Euro Sinks to New 2016 Low

EUR/USD Technical Analysis: Euro Sinks to New 2016 Low

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro drops below 1.08 figure, sets new 2016 low vs. US Dollar
  • Waiting for attractive trade opportunity to enter short position

The Euro breached October’s swing low to sink past the 1.08 figure and hit the lowest level yet in 2016 against the US Dollar. Early signs of positive RSI divergence hint that downside momentum may be ebbing however, opening the door for a corrective recovery on the horizon.

From here, a daily close below the 76.4% Fibonacci expansion at 1.0715 opens the door for a test of the 1.0517-34 area (December 2015 low, 100% level). Alternatively, a turn back above the 1.0826-51 zone (October 25 low, 61.8% Fib) clear the way for a challenge of the 50% expansion at 1.0917.

An actionable trade seems absent for the time being. A corrective upswing may open the door for a selling opportunity but a clearly-defined setup to enter short is absent for now. Opting for the sidelines seems most prudent in the interim.

What are the fundamental trends driving the Euro in the fourth quarter? Find out here !

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

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