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EUR/USD Technical Analysis: Topping Pattern Remains Valid

EUR/USD Technical Analysis: Topping Pattern Remains Valid

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/USD Technical Strategy: Short at 1.1640
  • Euro struggles to make headway on H&S top but the setup remains valid
  • Short trade remains in play, looking for a test of Fib support above 1.14

The Euro has made little downward progress since completing a bearish Head and Shoulders chart formation, but the topping remains conspicuously valid. That this remains the case despite a raft of high-profile developments on the fundamental side that might have derailed the setup seems telling of its potency.

Key support remains at 1.1423, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a test of the 50% level at 1.1216. Alternatively, a turn back above the 23.6% Fib at 1.1679 paves the way to challenge support-turned-resistance at 1.1749 once again.

The short EUR/USD trade that was triggered at 1.1640 remains active and continues to aim for an initial objective at 1.1423. A stop-loss will be activated on a daily close above 1.1749. Profit on half of the position will be booked and the stop-loss trailed to breakeven if and when the first target is achieved.

What are the fundamental forces driving EUR/USD through year-end? See our forecast here !

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