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EUR/USD Technical Analysis: Down Trend Resumption Hinted

EUR/USD Technical Analysis: Down Trend Resumption Hinted

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Talking Points:

  • EUR/USD Technical Strategy: Pending short at 1.0810
  • Euro breaks counter-trend line, hinting at long-term decline resumption
  • Recovery above 1.08 sought to alight risk/reward setup for short trade

The Euro looks to be resuming its ten-month down trend against the US Dollar having marked a top with the formation of a bearish Dark Cloud Cover candlestick pattern. A break of the series of higher highs and lows set from early March appears to mark confirmation of reversal.

A daily close below support-turned-resistance 1.0682 opens the door for a challenge of the February 22 low at 1.0682. Alternatively, a breach above 1.0874 (trend line, former support) sees the next upside barrier at 1.0966, a level that has acted as a sticking point for prices since late June 2016.

Prices are too close to immediate support to justify entering short from a risk/reward perspective. With that in mind, an entry order has been established to sell the pair at 1.0810. If activated, the position will initially target 1.0682 and carry a stop-loss to be triggered on a daily close above 1.0874.

What to retail traders’ buy/sell decisions imply about the Euro trend? Find out here !

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