EUR/USD Technical Analysis: Euro Topping Below 1.21 Figure?
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- EUR/USD Technical Strategy: Flat
- Negative RSI divergence hints Euro may be topping below 1.21 vs US Dollar
- Improved risk/reward parameters, rising trend break needed for short position
The Euro is struggling to make continued headway after hitting the highest level in nearly three years against the US Dollar, with negative RSI divergence hinting at possible topping. Still, the uptrend defined by the series of higher highs and lows set from April remains firmly intact.
Near-term support is at 1.1818, the 14.6% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a test of the 23.6% level at 1.1662. Alternatively, a push above the 23.6% Fib expansion at 1.2032 sees the next upside barrier marked by the 38.2% threshold at 1.2261.
Prices are too close to support to justify entering short on risk/reward grounds while RSI positioning warns against chasing the move higher. Furthermore, the upcoming ECB policy announcement may materially alter the chart setup. On balance, opting for the sidelines seems most prudent for now.
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