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EUR/USD Technical Analysis: Struggling to Extend Down Move

EUR/USD Technical Analysis: Struggling to Extend Down Move

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro sellers struggle to extend move beyond support sub-1.06 figure
  • Longer-term positioning favors bearish bias but trade setup absent

Euro sellers have struggled to maintain downward momentum since the single currency found support below the 1.06 figure against the US Dollar two weeks ago. Still, overall positioning continues to favor continuation of the long term down trend.

From here, a daily close below support in the 1.0518-28 area (November 24 low, 23.6% Fibonacci expansion) exposes the 1.0341-67 zone (December 15 low, 38.2% level). Alternatively, a turn above support-turned-resistance at 1.0682 paves the way for a retest of the 38.2% Fib retracement at 1.0828.

On one hand, prices are too close to support to justify entering short from a risk/reward perspective. On the other, the absence of a clear-cut bullish reversal signal argues against even a tactical long trade. With that in mind, standing aside seems most attractive until something more compelling presents itself.

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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