EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro rejected at resistance near 1.12, familiar support in play
- Daily close below 1.11 may set stage to retest August bottom
- Near-term chart setup warns weakness may yet be corrective
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Euro sellers prevailed on a retest of neckline support-turned-resistance near the 1.12 against the US Dollar, with prices turning sharply lower after a brief consolidative pause. An inflection zone just above the 1.11 figure is back in play as support, with daily close below that targeting the August low at 1.1027.
Daily EUR/USD chart created in TradingView
Zooming in to the four-hour chart, the break past this threshold seems to have occurred already. Betting on imminent downside follow-through might be premature however as EUR/USD retests downward-sloping resistance-turned-support guiding the downswing from late June.
While prices are above this barrier, recent weakness may yet prove to be corrective within a broader upshift from August’s low. That might tilt sellers’ risk/reward calculus away from piling into positions absent a fresh external trigger. It remains to be seen if bellicose comments from Donald Trump are just that.
4-hour EUR/USD chart created in TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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