EURUSD Technical Analysis: Trend Bias Bearish Amid Congestion
EURUSD TECHNICAL ANALYSIS: NEUTRAL
- Euro chart sending mixed signals as prices struggle in congestion
- Traders might withhold conviction bets until greater clarity is had
- Long-term positioning still argues for a broadly bearish trend bias
See the latest Euro technical and fundamental forecast to find out what will drive prices in Q3!
Euro technical positioning has been somewhat confounding in recent weeks. The currency completed a bullish Falling Wedge chart formation, hinting that an upturn against the US Dollar is in the cards. Prices have struggled for follow-through however. A rejection downward on a test above the 1.14 figure led to a break of trend support set form late May, hinting that the nascent rebound has died in infancy.
Sellers may find it premature to celebrate however. Thus far, the down move has only retested Wedge top, leaving the bullish implications of its break intact. A rebound here has now brought on a challenge of the broken rising trend line as resistance, leaving markets wondering which recently breached technical level will hold up and which reversal – upward or downward – will end up being neutralized.
Practically speaking, this probably means that traders will withhold directional conviction until a concrete break from congestion is secured. In the meantime, zooming out to the monthly chart for a bit of context seems instructive. Prices remain locked in a decade-long decline – recent chop aside – appear to be grinding lower after breaking support in the 1.1449-1.11554 zone. The 1.05 figure beckons ahead.
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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.