EUR/USD Technical Analysis: Euro Bounce Stalls, Trend Aims Lower
EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro rebound vs US Dollar stalls at former support below 1.11 figure
- Near-term trend bias likely bearish absent a daily close above 1.1183
- Break past October floor eyes support clustered around the 1.05 mark
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The Euro corrected higher after finding support in the 1.0968-90 area, moving to retest the 1.1069-80 inflection region as resistance. A daily close above that is likely to open the door for a retest of the 1.1176-83 zone, where a corrective rebound from early-October lows appeared to be exhausted.
As it stands, the pair’s breach of counter-trend support following the last challenge of this barrier continues to suggest that a corrective upswing has given way to resumption of the broader downtrend. This means that – absent a daily close back above 1.1183 – the dominant trend bias probably favors Euro weakness.
A turn lower from here that leads EUR/USD to establish a foothold below 1.0968 would put the spotlight on the October 1 low at 1.0879. Clearing that barrier seems is a prerequisite for making the case for convincing bearish follow-through.
The monthly chart offers a glimpse of what the next steps thereafter might look like. Prices have drifted steadily lower since breaking support at 1.1449 over a year ago. Taking out last month’s low would pave the way for this process to continue toward the next pivotal barrier in the 1.0459-1.0563 zone.
Monthly EUR/USD chart created with TradingView
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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.