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EUR/USD Technical Analysis: 11-Month Down Trend at Risk

EUR/USD Technical Analysis: 11-Month Down Trend at Risk

Ilya Spivak, Head Strategist, APAC

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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.

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.