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EUR/USD Technical Analysis: Uncomfortable at 7-Month Highs?

EUR/USD Technical Analysis: Uncomfortable at 7-Month Highs?

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro rises to the highest level in nearly seven months vs. US Dollar
  • Negative RSI divergence warns of turn as long-term resistance nears

The Euro continues rise against the US Dollar, advancing to the highest level in nearly seven months, but negative RSI divergence hints at ebbing upside momentum. The longer-term trend continues to broadly favor the downside, with key resistance now just below the 1.14 figure.

Nearer term, a daily close above the 61.8% Fibonacci expansion at 1.1261 opens the door for a challenge of the 76.4% level at 1.1361. Alternatively, a reversal back below the 50% Fib at 1.1181 – now recast as support – paves the way for a retest of the 38.2% expansion at 1.1100.

An actionable trade setup is absent at this point. The absence of a clear-cut bearish reversal signal argues against a short trade. On the other hand, prices are too close to resistance to make a tactical long trade attractive from a risk/reward perspective. With that in mind, opting to stay flat seems most prudent.

How has our second-quarter Euro forecast shaped up so far with a month left to go? Find out here !

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

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