EUR/USD Technical Analysis: Downtrend Intact Amid Consolidation
EUR/USD Technical Strategy: NET SHORT AT 1.2153
- Euro locked in familiar congestion area capped near 1.17 figure
- Dominant trend trajectory continues to favor broadly bearish bias
- EUR/USD short trade in play, looking for downtrend resumption
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The Euro remains locked in a choppy consolidation range after a rebound from support near the 1.13 figure stalled below resistance capping gains since early June. In fact – a brief swoon in mid-August notwithstanding – the pair has barely budged from the same congestion area since late May.
Breaking above the outer layer of that barrier – now at 1.1702 – is needed to neutralize the near-term bearish bias. If that were to happen, the next resistance threshold would emerge in the 1.1840-52 area. Alternatively, a reversal back below support in the 1.1530-54 zone opens the door for descent back toward 1.13.
Pulling back from near-term price action to size up longer-term positioning on the monthly chart, it seems clear enough that the dominant downtrend stretching back over a decade is intact. Furthermore, the most recent leg of that move – launched in April of this year – shows no apparent signs of having ended.
With that in mind, the EUR/USD short position initially triggered at 1.2407 and subsequently scaled up, first near 1.19 and then once again at 1.1660, remains in play. A stop-loss will be activated on a discretionary basis, although a daily close above 1.1702 seems like a compelling reason for an exit.
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--- 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.