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EUR/USD TECHNICAL STRATEGY: SHORT AT 1.2274
- Euro selloff stalls after currency falls to one-month low against the US Dollar
- Overall chart setup favors weakness after a top was established below 1.26
- Short position activated on brief upswing, targeting move to 38.2% Fib level
The Euro has paused to digest losses after touching the lowest level in a month against the US Dollar but overall positioning hints further weakness is ahead. The single currency appeared to mark a top below the 1.26 figure last week having broken the series of higher highs and lows set from early January.
From here, a daily close below the 38.2% Fibonacci retracement at 1.2162 opens the door for a challenge of the 1.2046-70 area (50% level, resistance-turned-support). Alternatively, a move back above the January 17 high at 1.2323 sees the next major barrier at 1.2538, the January 25 top.
A corrective upswing allowed for improved risk/reward positioning and a short EUR/USD trade was activated at 1.2274, initially targeting 1.2162. A stop-loss will be triggered on a daily close above 1.2330. Profit on half of open exposure will be booked when (and if) the first objective is met.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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