EUR/USD Technical Strategy: SHORT AT 1.2407
- Euro trend favors downside despite lack of near-term conviction
- Short position activated near 1.24 figure continues to be in play
- US Dollar response to broad risk aversion likely to be decisive
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The Euro is struggling to find near-term directional conviction but overall chart positioning is still suggesting that the path of least resistance leads lower. Last week’s hint at bearish acceleration proved misleading but price action continues to be defined by a series of lower highs set from a double top formed below 1.26.
From here, a move below the March 20 bottom at 1.2240 opens the door for another challenge of the 38.2% Fibonacci retracement at 1.2173. Alternatively, a breach of falling trend line resistance – now at 1.2352 – confirmed on a daily closing basis sees the next upside barrier marked by the March 8 high at 1.2446.
A short EUR/USD trade activated at 1.2407 remains active. Profit was booked on half of open exposure when the trade’s initial target was reached. The rest is in play, looking to capture down trend resumption. Scope for follow-on weakness probably depends on how the US Dollar will react amid ongoing risk aversion.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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