EUR/USD Technical Strategy: SHORT AT 1.2407
- Euro recoils from 10-year resistance, breaks counter-trend support
- Breach below immediate support opens the door to test below 1.18
- Looking for improved risk/reward settings to add to short position
See our quarterly Euro trading guide to learn what will drive prices through mid-year!
The Euro looks to have marked a major downside reversal, ending a short-term uptrend and resuming a decade-long decline against the US Dollar. Prices recoiled from long-running channel resistance to close out April below trend line support guiding the corrective upswing from December 2016.
Near-term support is now at 1.1937, the 61.8% Fibonacci expansion. A daily close below that opens the door for a test of support shelf support at 1.1713. Alternatively, a move back above 1.2055-92 area (50% level, September 8 high) paves the way for a test of the 1.2154-73 zone (congestion are low, 38.2% Fib).
Half of the short EUR/USD trade from 1.2407 remains in play after partial profit was booked at the position’s initial objective. The pair is too close to immediate support to make adding to exposure appear sensible from a risk/reward perspective. Opportunities to do so on a break or bounce will be actively sought however.
EUR/USD TRADING RESOURCES
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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