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EUR/USD Technical Analysis: Aiming to Test Below 1.06 Figure

EUR/USD Technical Analysis: Aiming to Test Below 1.06 Figure

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/USD Technical Strategy: Short at 1.0623
  • Euro down trend resumption vs. US Dollar may be gaining momentum
  • Break of chart support suggests prices aiming to test below 1.06 figure

The Euro looks vulnerable to deeper losses after dropping to the lowest level in a month against the US Dollar, with prices seemingly poised to test below the 1.06 figure. The single currency reversed downward as expected after a test above the 1.08 threshold, completing a bearish Rising Wedge chart pattern.

A daily close below the 14.6% Fibonacci expansion at 1.0643 has exposed the 23.6% level at 1.0528 as the next downside barrier. A further push below that targets the 38.2% Fib at 1.0341. Alternatively, a reversal back above 1.0643 sees the next major upside threshold at 1.0828, the 38.2% Fib retracement.

Euro down trend resumption seems to be finding follow-through and a short position has been activated at 1.0623. The trade initially targets 1.0528. A stop-loss will be activated on a daily close above 1.0682. Profit will be taken on half of open exposure and the stop-loss moved to breakeven when the first objective is met.

Are other traders buying or selling the Euro, and what does that hint about the trend? Find out here !

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

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