EUR/USD Technical Analysis: Euro Biased Lower in Choppy Trade
EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro pinned to three-month trend resistance, searching for a catalyst
- Improved risk/reward, confirmation needed for actionable trade setup
- Break of 1.0924 needed to reboot downtrend, key resistance at 1.1116
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The Euro has spent over a week pinned to resistance guiding its downward trend against the US Dollar since late June. This hurdle is reinforced by a variety of overlapping barriers running up through 1.1116. A daily close above that would neutralize near-term selling pressure, setting the stage for a retest of 1.12.
Immediate support is at 1.0995, the 23.6% Fibonacci expansion. Making the case for true downside resumption probably requires a close below the 1.0924-26 area however, marked by September’s monthly low and the 38.2% level. Delivering as much would initially open the door for a decline to test to the 50% expansion at 1.0867.
In all, current positioning does not seem to offer an actionable trade setup. Taking on the long side seems wholly unattractive from a risk/reward perspective as prices kiss resistance even as a clear-cut sell signal is conspicuously absent. Traders may wait for a fresh catalyst before committing one way or another.
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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.