EUR/USD Technical Strategy: SHORT AT 1.2407
- Euro rejected at familiar trend line resistance once again
- Break of minor support exposes support below 1.22 figure
- Opting not to scale up exposure as Fed policy call looms
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The Euro appears to be vulnerable to deeper losses against the US Dollar after a break below near-term chart support opened the way below the 1.22 figure. Another brief foray to the upside proved fruitless, with the single currency rejected on a test of trend line resistance capping gains since mid-February yet again.
A break below the March 9 lowat 1.2273 has exposed the 38.2% Fibonacci retracement at 1.2173. A further breach below that confirmed on a daily closing basis targets the 1.2055-70 area (50% level, August 29 high). Alternatively, a move back above 1.2273 aims for a retest of trend line resistance, now at 1.2374
The second half of a short EUR/USD position from 1.2407 remains in play after initial profit was booked last week., looking to capture any further weakness. Scaling up exposure seems ill-advised as the FOMC rate decision looms ahead however. The stop-loss will be triggered on a daily close above 1.2446.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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