EUR/USD Technical Analysis: Trend Reversal Under Way?
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- EUR/USD Technical Strategy: Flat
- Euro breaks lower from consolidation, trend may be reversing
- Risk/reward parameters argue against entering short for now
The Euro broke sharply lower after prolonged consolidation near the 1.12 figure against the US Dollar, hinting that a near-term trend reversal may be in the works. The turn came against a backdrop of deepening negative RSI divergence, which seems to bolster the case for downside follow-through.
From here, a daily close below the 23.6% Fibonacci retracement at 1.1125 opens the door for a test of the 38.2% level at 1.1019. Alternatively, a move back above the 14.6% Fib at 1.1190 – now recast as resistance – paves the way for another challenge of the June 2 high at 1.1285.
Risk/reward considerations argue against entering a short position: the available trading range is too narrow relative to ATR and prices are sitting squarely at support. With that in mind, opting for the sidelines seems sensible for now until a better-defined opportunity presents itself.
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