EUR/USD Technical Analysis: Down Trend Intact After Bounce

EUR/USD Technical Strategy: SHORT AT 1.2407

• Euro posts largest one-day gain in six weeks versus US Dollar
• Rise seen as corrective within broader down trend resumption
• Looking for actionable opportunities to add to short exposure

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

The Euro managed to score the largest one-day gain in six weeks against the US Dollar but the dominant trend bias continues to favor on-going weakness. Long-term positioning suggests the single currency marked the resumption of a decade-long down trend with April’s monthly close.

From here, a daily close above the 61.8% Fibonacci retracement at 1.1937 opens the door for a retest of former support in the 1.2055-92 area (50% level, September 8 high). Alternatively, a move below the chart inflection point at 1.1825 paves the way for a challenge of the November 21 low at 1.1713.

Short EUR/USD exposure from 1.2407 remains in play. Profit was booked on half of the initial trade when it hit its first objective and the rest is active, looking downside follow-through. Opportunities to scale up position will be evaluated as they present themselves.

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

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