EUR/USD Technical Analysis: 1-Month Uptrend Broken. Now What?
EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro breaks near-term support, hints at downtrend resumption
- Lasting downside follow-through likely needs more confirmation
- Critical range resistance positioned just below the 1.12 figure
The Euro extended downward as expected, piercing support defining the upswing from late-November lows and pushing prices down to test the 1.1069-1.1104 congestion area. A daily close under its lower boundary sets the stage to challenge the 1.0968-90 region.
Zooming into the four-hour chart reveals near-term resistance marked by a downward-sloping trend line connecting recent swing tops, now at 1.1148. Recovering a foothold above that would set the stage to challenge range top resistance just below the 1.12 figure that has capped the upside since mid-October.
Tactically speaking, positioning squarely atop support might make the current setup unattractive from a risk/reward perspective to would-be sellers. A month-long uptrend may have been violated, but that need not precede a selloff. A period of consolidation may yet precede another foray upward.
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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.