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EUR/USD Technical Analysis: Euro Sellers Take Aim at Key Support

EUR/USD Technical Analysis: Euro Sellers Take Aim at Key Support

2019-01-18 01:30:00
Ilya Spivak, Head Strategist, APAC
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EUR/USD Technical Strategy: BEARISH

  • Euro range break unravels, rally rejected at 12-month resistance line
  • Sellers now targeting key counter-trend support just above 1.13 figure
  • Break lower would point to resumption of the long-term down trend

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The Euro failed to make good on an attempted break higher from a range confining price action against the US Dollar since late October. The pair briefly breached resistance in the 1.1456-81 area but the upswing ran out of steam on a test of trend line resistance set from January 2018. A test of this barrier produced a bearish Evening Star candlestick, which was soon followed by a drop back into familiar territory.

Euro vs US Dollar chart - daily

Sellers are now eyeing counter-trend support guiding the upswing from lows set in mid-November. A daily close below this barrier – now at 1.1328 – would suggest the dominant long-term decline is ready to be reasserted. The first downside hurdle to follow is the November 12 low at 1.1216, followed by a support shelf in the 1.1110-32 zone.

The 1.1456-81 region is back as immediate resistance. Another foray above it would open the door for a test of 1.1554. This appears to be a pivotal spot for bears, marking the intersection of trend line resistance and a chart inflection area in play since November 2017. Establishing a foothold above this would go a long way toward de-fusing immediate selling pressure.

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

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

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

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