EUR/USD Technical Analysis: All Eyes on Congestion Area Support
EUR/USD Technical Strategy: SHORT AT 1.2407
- Near-term Euro positioning a bit more bearish vs last week
- Congestion support break needed to confirm larger selloff
- Tactically holding short trade from 1.24 still looks sensible
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The Euro recoiled from two-month trend line resistance against the US Dollar but sellers are still unable to punch through long-standing congestion area support. The symmetric Triangle setup noted last week seems to be invalidated however, marking a small but noteworthy bearish update of near-term positioning.
From here, a daily close below the 1.2154-73 area (March 1 low, 38.2% Fibonacci expansion) exposes the 1.2055-70 zone (50% level, August 29 high). Alternatively, a push back above near-term resistance at 1.2300 opens the door for another run at the falling trend line, now effectively at the 1.24 figure.
Retaining in play the second half of a short EUR/USD position triggered at 1.2407 continues to look sensible after partial profit was booked. Price action over the past week seems to have tipped the scales a bit more in favor of a long-term down trend continuity. Confirmation will be sought for scale-up opportunities.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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