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Talking Points:
- EUR/USD Technical Strategy: Flat
- Euro challenging 11-month down trend resistance above 1.08 mark
- Clear-cut bearish reversal signal needed to initiate short position
The Euro has recovered to the highest level in almost two months against the US Dollar, with prices testing trend-defining chart resistance above 1.08. A break above this barrier would overturn the downward trajectory defining price action since early May 2016.
A daily close above 1.0828 (falling trend line, 38.2% Fibonacci retracement) initially opens the door for a test of the 50% level at 1.0978. Alternatively, a turn back below resistance-turned-support at 1.0682 paves the way for a challenge of the 1.0494-1.0528 area (February 22 low, 23.6% Fib expansion).
While prices are perched at a logical place for downward reversal, the absence of a defined topping signal suggests it is premature to enter short for now. Opting for the sidelines seems more prudent until adequate confirmation presents itself.
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