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EUR/USD Technical Analysis: Euro Rise Puts 17-Month Trend at Risk

EUR/USD Technical Analysis: Euro Rise Puts 17-Month Trend at Risk

2019-10-22 02:00:00
Ilya Spivak, Sr. Currency Strategist
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EUR/USD TECHNICAL ANALYSIS: BEARISH

  • Euro on the upswing vs US Dollar, eyeing resistance above 1.12
  • Overall trend still bearish but prices threatening 17-month hurdle
  • Confirmation, improved risk/reward needed for actionable setup

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The Euro extended higher after clearing resistance guiding it lower against the US Dollar since late June, as expected. The single currency now looks poised to challenge the 61.8% Fibonacci retracement at 1.1209, with a break above that on a daily closing basis exposing the 78.6% level at 1.1298.

Initial support is at 1.1146, the 50% Fib. Reversing back below that puts the 1.1069-83 area, marked by a chart inflection zone and the 38.2% retracement, into focus. Critically, breaking below that would also pierce upward-sloping support defining the upswing, suggesting resumption of the longer-term decline.

Euro vs US Dollar price chart - daily

Daily EURUSD chart created in TradingView

Indeed, zooming out to the weekly chart, the recent upswing looks clearly contained within the bounds of a downtrend in play since mid-2018. In fact, EUR/USD now finds itself testing the move’s upper limits. Needless to say, this is a natural place to look for signs of topping, such as they might be.

EUR/USD Technical Analysis: Euro Rise Puts 17-Month Trend at Risk

Weekly EURUSD chart created in TradingView

Having said that, an actionable bearish reversal signal is conspicuously absent for now and the possibility of a trend-altering upside breakout cannot be ruled out. Nevertheless, chasing recent gains on the long side might be an unattractive proposition from a risk/reward perspective, at least for now.

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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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