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EUR/USD Technical Strategy: BEARISH

  • Euro recoils from 14-month downtrend resistance vs US Dollar
  • Weekly chart hints prices setting the stage for a move sub-1.10
  • Confirmation sought following the passing of critical event risk

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

The Euro recoiled from resistance guiding it lower against the US Dollar since January 2018, as expected. Prices have now broken past key support in the 1.1216-34 area underpinning the choppy range capping losses since early November. That has exposed the next downside barrier in the 1.1110-32 zone.

Euro vs US Dollar chart - daily

Zooming out to the weekly chart, the picture looks still more ominous for the single currency. That reveals prices are on the verge of clearing a support shelf in play since mid-August. A successful breach faces relatively mild support thereafter until the 1.0829-1.0912 zone comes into play.

EUR/USD Technical Analysis: Sellers Try to Clear a Path Below 1.10

That seems to lay the groundwork for what may be a pronounced decline in the weeks and months ahead. Immediate event risk by way of US jobs data might limit immediate sellers’ conviction in the near term however, sapping follow-through. If the weekly close confirms a breakout however, that could change.

EUR/USD TRADING RESOURCES

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

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