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EUR/USD Technical Analysis: Aiming to Test Above 1.08

EUR/USD Technical Analysis: Aiming to Test Above 1.08

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro appears poised to test above 1.08 figure versus US Dollar
  • Looming event risk argues against counter-trend long position

The Euro may now be aiming to test the waters above the 1.08 figure after prices rallied to the highest level in six weeksagainst the US Dollar. Recent gains confirm expectations of a near-term upward trend reversal but the dominant, long-term trajectory still seems to favor a bearish bias.

From here, a daily close above the 38.2% Fibonacci retracement at 1.0828 paves the way for a test of the 50% level at 1.0978. Alternatively, a move back below resistance-turned-support at 1.0641 – the 23.6% Fib – sees the next downside barrier marked by the 14.6% retracement at 1.0527.

Attempting a tactical long position to capture corrective gains as an ECB monetary policy announcement approaches seems ill-advised. At the same time, the absence of a discrete bearish reversal signal argues against fading the move higher. Opting for the sidelines seems most prudent for now.

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