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
Get help building confidence in your EUR/USD strategy with our free trading guide!
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.
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
EUR/USD TRADING RESOURCES
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- Join a free webinar and have your questions answered
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter