EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro breaks 4-month resistance, opening the door for an upswing
- Dominant trend likely to remain bearish through corrective gains
- Monthly chart warns the Euro is on pace to revisit two-year lows
Get help building confidence in your EUR/USD strategy with our free trading guide!
The Euro has broken falling trend line resistance guiding it lower against the US Dollar since late June, suggesting a correction higher is afoot. From here, a daily close above the 38.2% Fibonacci retracement at 1.1083 opens the door for a test of the 50% level at 1.1146.
Breaking below counter-trend support set from the October 1 low looks to be a minimum pre-requisite to reengaging the downtrend. A daily close below that as well as resistance-turned-support at the just-broken trend line sets the stage to challenge the monthly low at 1.0879 once again.
![Euro vs US Dollar price chart - daily](https://a.c-dn.net/b/0ECdwh/EURUSD-Technical-Analysis-Euro-Rise-Unlikely-to-Undo-Downtrend_body_Picture_1.png)
Daily EURUSD chart created in TradingView
All the same, the dominant trend bias continues to look decidedly bearish. A look at the weekly chart shows prices locked in a well-defined descent for the past 16 months. Invaliding that calls for a break north of that move’s upper boundary, now just a hair below the 1.13 figure.
![Euro vs US Dollar price chart - weekly](https://a.c-dn.net/b/2W6mh7/EURUSD-Technical-Analysis-Euro-Rise-Unlikely-to-Undo-Downtrend_body_Picture_3.png)
Weekly EURUSD chart created in TradingView
The monthly chart looks still more ominous. It seems to show the Euro poised to prolong what has been a more than decade-long decline. Prices finished September with a break of the multi-year price inflection barrier at 1.0980. That seems to set the stage for a test of the 1.0459-1.0563 zone in the months ahead.
![Euro vs US Dollar price chart - monthly](https://a.c-dn.net/b/43Dc8O/EURUSD-Technical-Analysis-Euro-Rise-Unlikely-to-Undo-Downtrend_body_Picture_4.png)
Monthly EURUSD 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