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- EUR/USD Technical Strategy: Flat
- Euro approaching key resistance near 1.19 figure after spirited recovery
- Chart positioning continues to favor a broadly bearish bias in the near term
The Euro has mounted a spirited recovery against the US Dollar after finding support near the 1.17 figure but the dominant trend bias still favors weakness. Near-term positioning continues to be defined by a series of lower highs and lows, painting recent gains as corrective (at least for now).
From here, a daily close above the 1.1900 figure (trend line, 23.6% Fibonacci expansion) opens the door for a challenge of the 1.2041-70 area (38.2% level, August 29 high). Alternatively, a reversal back below the 14.6% expansion at 1.1812 exposes the 1.1711-21 zone (38.2% Fib retracement, October 5 close).
The second half of a short EUR/USD trade triggered at 1.1849 has been stopped out at breakeven after profit was booked on the first half of the position. An actionable bearish reversal signal is now needed to re-establish the trade. In the meantime, opting for the sidelines seems most prudent.
See our Q4 forecast to learn what will drive trends for the Euro and the US Dollar through year-end!