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EUR/USD Technical Analysis: Selloff to Resume After Consolidation

EUR/USD Technical Analysis: Selloff to Resume After Consolidation

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Talking Points:

  • EUR/USD Technical Strategy: Short at 1.0477
  • Euro digesting losses after breaking support from March 2015
  • Brief upward spike has activated short trade below 1.05 figure

The Euro paused to digest losses after sinking to the lowest level in almost 14 years against the US Dollar following the Fed monetary policy announcement. A break of support holding up prices since March 2015 suggests the lull is a brief respite before selling pressure returns in earnest.

Near-term support is now at 1.0342, the 61.8% Fibonacci expansion, with a break below that on a daily closing basis exposing the 76.4% level at 1.0225. Alternatively, a turn above the 1.0444-59 area (50% level, March 13 2015 low) sees the next upside barrier in the 1.0520-45 zone (April 13 2015 low, 38.2% Fib).

A short-lived upward spike triggered an entry order to short EUR/USD at 1.0477 and the trade is now in play, initially targeting 1.0342. A stop-loss will be activated on a daily close above 1.0545. Half of the position will be booked and the stop moved to breakeven when the first objective is reached.

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