EUR/USD Technical Analysis: Euro Down Trend Back in Play
EUR/USD Technical Strategy: SHORT AT 1.1648
- Euro snaps near-term trend line, hinting dominant decline is back in play
- All eyes on critical support near the 1.13 figure for bearish acceleration
- Waiting for improved risk/reward set to add to EUR/USD short position
The Euro downtrend against the US Dollar looks to have been re-energized after a brief corrective upswing. Prices have broken the counter-trend support line guiding the move higher from the October 31 low, marking a step toward resumption of its long-term decline.
Turning to the daily chart, prices now look poised to revisit support in the 1.1268.-1301 area, which has bedeviled sellers since mid-August. A break below it confirmed on a daily closing basis opens the door for a challenge of the 1.1110-19 zone.
Near-term resistance is at 1.1432, marked by the October 9 low as well as a falling trend line. A reversal above that – with a daily close serving as confirmation of a breach yet gain – paves the way for another test of the 1.1543-54 inflection band.
The short EUR/USD position triggered at 1.1708 and then scaled up at 1.1468 remains active. Increasing exposure seems unattractive from a risk/reward perspective. Opportunities to do so will be evaluated in the event of a bounce or break through immediate support.
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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.