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EUR/USD Technical Strategy: Flat

  • Euro break of counter-trend support hints at bearish resumption
  • Positioning on the daily EUR/USD chart still appears congested
  • Confirmation sought before re-establishing short side exposure

Build confidence in your Euro trading strategy with our free guide!

The Euro may be attempting to resume its downward trend against the US Dollar yet again. The four-hour chart shows prices breaking counter-trend support guiding them higher over the past week after yet another rejection at resistance capping gains since mid-October. What’s more, the broken support line held up on a retest, seemingly bolstering the case for bearish continuation to follow.

EUR/USD Technical Analysis: Are Sellers Ready to Retake the Lead?

A look at the daily chart warns against premature conviction however. Prices remain wedged between resistance set from September’s swing high and congestion area support in the 1.1267-1.1301 zone. Besides the congested setup’s insinuation at the absence of directional conviction, the narrowing range framed by immediate chart barriers makes for unattractive risk/reward parameters.

EUR/USD Technical Analysis: Are Sellers Ready to Retake the Lead?

On balance – while the long-term EUR/USD trend continues to look decidedly bearish – an actionable short trade setup appears to be missing now. A daily close below 1.1267 might well serve as a trigger to take on exposure, although this too will need to be evaluated on risk/reward grounds when and if it happens. In the meantime, standing aside seems prudent.

EUR/USD TRADING RESOURCES

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

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