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EUR/USD Technical Analysis: All Eyes on Congestion Area Support

EUR/USD Technical Analysis: All Eyes on Congestion Area Support

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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

See our quarterly Euro trading guide to learn what will drive prices through mid-year!

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.

Euro vs US Dollar daily price chart

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.

EUR/USD TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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