EUR/USD Technical Strategy: NET SHORT AT 1.2276
- Euro down trend vs US Dollar intact amid consolidation near 1.18
- Triangle chart setup hints bearish resumption is in the cards ahead
- Waiting for confirmation to further scale up short EUR/USD trade
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The Euro is consolidating below the 1.18 figure against the US Dollar but chart positioning looks to favor a downward directional bias. Prices are hovering above resistance-turned-support marking the top of a two-year range having seemingly resumed a decade-long decline in early April.
Turning to the daily chart, prices seem to have formed a Triangle pattern. That often precedes trend continuation, which in the context of the prior drop carries bearish implications. A daily close below the Triangle floor opens the door for a test of support in the 1.1527-77 area. Resistance is now at 1.1775.
The EUR/USD short trade initiated at 1.2407 and thereafter scaled up near 1.19 continues to be in play. While the down move is expected to resume, adding to exposure here seems premature absent confirmation on a daily close below the Triangle’s lower bound.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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