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EUR/USD Technical Analysis: Trend-Defining Support Under Fire

EUR/USD Technical Analysis: Trend-Defining Support Under Fire

2019-01-23 01:00:00
Ilya Spivak, Sr. Currency Strategist
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EUR/USD Technical Strategy: BEARISH

  • Euro pressuring support guiding two-month upswing vs US Dollar
  • Confirmed breakdown may signal long-term down trend resumption
  • Conviction may be lacking before ECB monetary policy decision

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The Euro is probing support guiding the choppy upswing against the US Dollar since mid-November. The currency pair recoiled form trend line resistance set from January 2018 earlier this month following the formation of a bearish Evening Star candlestick pattern.

A daily close below trend line support – now at 1.1335 – may confirm the nominally ongoing two-month rise as corrective in the context of a longer-term decline. The next downside hurdle is at 1.1216, the November 12 low. Alternatively, a bounce above resistance at 1.1481 targets the 1.1543-54 area at first.

Euro vs US Dollar chart - daily

Tactically speaking, traders may be reluctant to commit at this point. Sellers might be put off by risk/reward considerations as prices sit at support while buyers hold out for confirmation by way of a discrete bullish reversal signal. The incoming ECB monetary policy announcement may force the issue however.

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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