EUR/USD Technical Analysis: Bias Bearish Despite Sharp Upswing
EUR/USD Technical Strategy: BEARISH
- Euro breaks counter-trend support, hints dominant decline resuming
- Largest 1-day rise in 2 weeks conspicuously fails to undo breakdown
- Sellers likely eyeing near-term positioning for signs of capitulation
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The Euro looks to be resuming the downward trend started in January 2018 against the US Dollar, despite a spirited rise on Friday. The currency has breached counter-trend support guiding the retracement from mid-November lows. The latest surge conspicuously failed to undo that break, hinting it was corrective.
Overlapping layers of resistance now face buyers hoping for upside follow-through. The counter-trend support zone, two notable chart inflection areas and the outer bound of 12-month resistance would need to be overcome to meaningfully neutralize near-term selling pressure. That implies returning above 1.1552.
With that in mind, would-be sellers might look to Friday’s rally as an opportunity to establish or build upon exposure once the upswing appears to have run out of steam. Evidence to that effect appears absent for now, but the week ahead offers plenty of event risk to inspire trend development.
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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.