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EUR/USD Technical Analysis: Choppy Range Belies Bearish Bias

EUR/USD Technical Analysis: Choppy Range Belies Bearish Bias

2019-01-08 02:30:00
Ilya Spivak, Head Strategist, APAC
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EUR/USD Technical Strategy: SHORT AT 1.1297

  • Euro stuck in choppy range below 1.15 mark for nearly 2 months
  • Inconclusive near-term setup keeps long-term bearish bias intact
  • Break below support near 1.13 needed for downside acceleration

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The Euro has struggled to make substantive directional progress against the US Dollar since mid-November. The currency pair is stuck below well-worn resistance in the 1.1456-81 area having failed on multiple attempts to establish a foothold above it on a closing basis. Support is marked by a rising trend line, now at 1.1311.

EUR/USD Technical Analysis: Choppy Range Belies Bearish Bias

Sizing up longer-term positioning however, the overall trend bias still looks firmly bearish despite the recent standstill. The weekly chart shows prices capped by resistance guiding the down move started nearly a year ago after the break of the 2017 advance.

EUR/USD Technical Analysis: Choppy Range Belies Bearish Bias

Turning to the monthly chart, the next leg of the decade-long decline still looks to be ahead after prices broke long-standing resistance-turned-support in the 1.1449-1.1554 zone. The barrier even held up on a retest in the past two months, reinforcing the validity of the breakdown.

EUR/USD Technical Analysis: Choppy Range Belies Bearish Bias

With that in mind, the short EUR/USD trade activated at 1.1297 will remain in play. The original setup has materially changed but the overall logic behind establishing exposure seems to still make sense. Opportunities to add to the trade will be evaluated as they arise. A stop-loss will be triggered on a discretionary basis.

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--- 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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