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EUR/USD Technical Analysis: Euro Down Trend Back in Play

EUR/USD Technical Analysis: Euro Down Trend Back in Play

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Talking Points:

  • EUR/USD Technical Strategy: Pending short at 1.0767
  • Euro breaks monthly support, hints long-term down trend resuming
  • Near-term upswing sought to enter short position below 1.08 figure

The Euro turned lower as expected after hitting a two-month high against the US Dollar, with chart positioning hinting the longer-term down trend is resuming. Prices broke through support formed by the floor of a Rising Wedge chart pattern, suggesting the corrective upswing from January lows has ended.

From here, a daily close below the 14.6% Fibonacci expansion at 1.0643 opens the door for a test of the 23.6% level at 1.0528. Alternatively, a reversal above the 38.2% Fib retracement at 1.0828 paves the way for a challenge of the 50% threshold at 1.0978.

Prices are too close to near-term support to justify entering a short trade from a risk/reward perspective. With that in mind, an order has been set to sell the pair at 1.0767 in the event of a near-term bounce. If triggered, the position will aim for a return to 1.0643 and carry a stop-loss activated on a daily close above 1.0828.

Will the Euro continue to rise through the first quarter of 2017? See our forecast and find out!

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

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