EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro struggling to find follow-though after probing below 1.11
- Conflicted near-term positioning looking for external catalyst
- Bearish resumption needs August low, former resistance break
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The Euro slipped back below the 1.1101-16 price inflection zone, but downside follow-through has struggled to materialize. Indeed, thus far sellers have managed nothing more than to probe July’s closing low of 1.1072. This barrier is reinforced by the 50% Fibonacci expansion at 1.1057.
A daily close below the latter boundary opens the door to challenge the 1.1012-27 area, marked by the August 1 low and the 61.8% level. Overcoming this now seems necessary to make the case for downside follow-through. A turn back above 1.1116 puts the 23.6% Fib at 1.1159 in focus as immediate resistance.
Daily EURUSD chart created in TradingView
A look at the four-hour chart might help explain indecision. As noted last week, positioning is sending conflicting cues as the drive past support nevertheless leaves prices atop downward-sloping resistance-turned-support guiding the downswing from late June.
Holding above this barrier keeps alive the possibility that recent weakness marks a correction in a broader rise from August lows rather than the resumption of the long-term downtrend. External impetus seems needed to break the deadlock before true conviction returns. The Fed’s Jackson Hole symposium may be just that.
4-hour EURUSD chart created in TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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