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Talking Points:
- EUR/USD Technical Strategy: Pending short at 1.2308
- Euro breaks near term uptrend, hints at further weakness ahead vs US Dollar
- Entry order established to trigger short trade with improved risk/reward setup
The Euro looks to have established a top below the 1.26 figure against the US Dollar, with prices now seemingly poised to probe below 1.22 mark. The near-term series of higher highs and lows started from the January 9 bottom has been broken, implying the immediate path of least resistance favors the downside.
Support now lines up at 1.2162, the 38.2% Fibonacci retracement, with a daily close below that opening the door for a challenge of the 1.2046-70 area (50% level, August 29 high). Alternatively, a move back above support-turned-resistance at 1.2323 exposes the January 25 high at 1.2538 anew.
Prices are a bit too close to support to justify entering short from a risk/reward perspective. With that in mind, an entry order will be set sell EUR/USD at 1.2308. If activated, the trade will initially target 1.2162 and carry a stop-loss triggered on a daily close above 1.2383.
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