EUR/USD Technical Analysis: Euro Erases 2016 Gains vs. US Dollar
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- EUR/USD Technical Strategy: Short at 1.0700
- Euro erases 2016 gains, drops below 1.06 against US Dollar
- Early signs of positive RSI divergence hint at bounce ahead
The Euro has erased all of the year’s against the US Dollar, with prices slipping back below the 1.06 figure to revisit levels unseen since December 2015. Preliminary signs of emerging positive RSI divergence suggest downside momentum may be ebbing and hint a bounce may be ahead.
Near-term resistance is at 1.0715, the 76.4% Fibonacci expansion, with a daily close above that opening the door for a retest of the 1.0826-51 area (October 25 low, 61.8% level). Alternatively, a push below support in the 1.0517-34 area (December 2015 low, 100% level) exposes the 123.6% expansion at 1.0353.
The EUR/USD short position activated at 1.0700 has hit its initial target at 1.0534 and profit has been booked on half of the trade. Remaining exposure will remain open for now, looking to capture any follow-on weakness. The stop-loss has been adjusted to the breakeven level.
What are the fundamental trends driving the Euro in the fourth quarter? Find out here!