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EUR/USD Technical Analysis: Topping Near 1.19 Figure?

EUR/USD Technical Analysis: Topping Near 1.19 Figure?

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro testing above 1.19 figure after rising to 30-month high vs. US Dollar
  • Negative RSI divergence hints at downturn but confirmation absent for now

The Euro has advanced to the highest level since January 2015against the US Dollar, with prices now attempting to secure a foothold above the 1.19 figure. Negative RSI divergence warns of ebbing upside momentum however, which may precede a reversal downward.

A daily close above the 50% Fibonacci expansion at 1.1909 opens the door for a test of the 61.8% level at 1.1979. Alternatively, a move back below the 38.2% Fib at 1.1839 sees the next downside barrier marked by the 14.6% expansion at 1.1752, a barrier reinforced by a rising trend line set from mid-July.

RSI divergence is sufficient by itself to justify entering a short position. Furthermore, the series of higher highs and lows defining the near-term uptrend remains firmly in place. Still, signs of possible reversal argue against taking up the long side. On balance, opting to stay flat seems most prudent.

What will drive the longer-term trend in the Euro? See our forecast here !

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

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