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EUR/USD Technical Analysis: Critical Long-Term Support Broken

EUR/USD Technical Analysis: Critical Long-Term Support Broken

2018-11-01 04:00:00
Ilya Spivak, Sr. Currency Strategist
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EUR/USD Technical Strategy: SHORT AT 1.1648

  • Euro breaks monthly chart support, paving the way for deeper losses
  • Near-term support just below 1.13, break to clear a path below 1.12
  • Improved risk/reward setup sought to add to EUR/USD short trade

See our Euro forecast to learn what is likely drive prices in the fourth quarter!

The Euro finished October with a break through range top resistance-turned-support bedeviling sellers for five months. In all, the barrier has been a pivotal long-term inflection point since May 2015. Its break portends downtrend acceleration against the US Dollar.

EUR/USD Technical Analysis: Critical Long-Term Support Broken

Turning to more immediate technical positioning, the daily chart shows prices sitting squarely atop support in the 1.1268-96 area. A push below this barrier confirmed on a daily closing basis opens the door for a challenge of the 1.1110-19 zone.

Initial resistance is at 1.1432, marked by the October 9 low. This is reinforced by a falling trend line defining the down move started from the late September high, now at 1.1473. A rebound that takes prices back above the latter threshold paves the way for a retest of the 1.1543-54 inflection region.

EUR/USD Technical Analysis: Critical Long-Term Support Broken

The short EUR/USD trade activated at 1.1708 and subsequently scaled up at 1.1468 continues to be in play. Prices’ perch at near-term support argues adding to exposure further on risk/reward grounds. Opportunities to do so will be evaluated on either a breakdown or a rebound toward daily chart resistance.

EUR/USD TRADING RESOURCES

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

To contact Ilya, use the comments section below or @IlyaSpivakon Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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