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EUR/USD Technical Analysis: 2-Month Down Trend Broken

EUR/USD Technical Analysis: 2-Month Down Trend Broken

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro looks to have broken a two-month down trend vs. US Dollar
  • Upswing may offer chance to get short in line with long-term trend

The Euro appears to have broken the down trend set from early November against the US Dollar, hinting that a larger recovery may be in the cards ahead. Near-term follow-through has proven lacking so far however, with prices locked in a choppy range above the 1.05 figure.

Near-term resistance is at 1.0641, the 23.6% Fibonacci retracement, with a break above that on a daily closing basis opening the door for a test of the 38.2% level at 1.0828. Alternatively, a reversal back below the 14.6% Fib at 1.0527 targets 1.0367, a support shelf established in mid-December.

The overall trend bias looks decidedly bearish but short-term positioning seems to favor gains. On balance, this argues for patience until whatever upswing materializes from here fizzles out, offering a more attractive selling opportunity. Standing on the sidelines seems most prudent in the meantime.

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