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EUR/USD Technical Analysis: Euro Drops Most in 3 Months

EUR/USD Technical Analysis: Euro Drops Most in 3 Months

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Talking Points:

  • EUR/USD Technical Strategy: Short at 1.0684
  • Euro suffers largest drop in over 3 months, breaks chart support
  • Short position aims for descent toward 1.06 figure vs. US Dollar

The Euro accelerated downward, posting the largest daily decline in over three months, having established a top below the 1.09 figure as expected. The reversal has invalidated the uptrend form March swing lows, hinting the long-term down trend against the US Dollar is resuming.

Near-term support is now at 1.0605, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a test of the February 22 low at 1.0494. Alternatively, a reversal back above support-turned-resistance at 1.0720, the 14.6% Fib, exposes 1.0874 (former support, trend line).

A bounce to activate an entry order set at 1.0810 was not to be. That has been canceled in favor of an outright short at 1.0684. The trade initially aims for 1.0605, with a stop-loss to be triggered on a daily close above 1.0720. Profit on half of exposure will be booked and the moved to breakeven on meeting the first target.

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