EUR/USD Technical Analysis: Euro Sellers Threaten October Bottom
EUR/USD Technical Strategy: SHORT AT 1.1648
- Euro recoils from trend resistance, drops back to October swing low
- Broad trend bias bearish despite tepid weekly chart bottoming cues
- Waiting for better risk/ward before adding to EUR/USD short trade
See our Euro forecast to learn what is likely drive prices in the fourth quarter!
The Euro recoiled from resistance establishing the series of lower highs against the US Dollar initiated in late September. Prices slipped back through the inflection area in the 1.1543-58 zone and aiming for October’s low at 1.1432 once again.
A daily close below this barrier broadly opens the door for a move down toward support in the 1.1268-96 region, last tested in mid-August. Alternatively, push back above 1.1558 and the minor 1.1596-1.1620 resistance area opens the door for a push above the 1.17 figure.
The weekly chart hints a near-term bottom may be forming but confirmation is absent and the dominant long- and medium-term trend bias continues favors the downside. With that in mind, the short EUR/USD position triggered at 1.1708 and then scaled up at 1.1468 remains in play.
The overall cost basis is at 1.1648. A stop-loss will be activated on a discretionary basis. Opportunities to add to the position further will be evaluated as attractive risk/reward parameters present themselves. In the meantime, adopting a wait-and-see posture seems to be most prudent.
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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.