EUR/USD Technical Strategy: SHORT AT 1.2407
- Euro capped at channel ceiling, menacing counter-trend line
- Break lower opens the door for a test of support below 1.22
- Bearish bias invalidation point established above 1.24 mark
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The Euro is testing key near-term support against the US Dollar, with a break opening the door for resumption of a two-month down trend. Price action has been defined by a choppy falling channel since a double top was carved out below the 1.26 figure in late January to mid-February.
A daily close below trend line support guiding the latest upswing – now at 1.2288 – clears the way for another challenge of the 38.2% Fibonacci retracement at 1.2173. Alternatively, a push above range resistance at 1.2446 would also breach the channel top and expose the 1.2537-8 area (38.2% Fib retracement, double top).
The second half of a short EUR/USD trade triggered at 1.2407 remains in play after partial profit was booked at the position’s first objective, looking to take advantage of downward trend resumption. A stop-loss will be activated on a daily close above 1.2446. Scale-in opportunities will be evaluated as they appear.
EUR/USD TRADING RESOURCES
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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