EUR/USD Technical Analysis: Euro Ready to Reverse Uptrend?
EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro breaks December support, threatening bounds of 3-month recovery
- Confirmation of bearish resumption eyes initial support just under 1.09
- Long-term trend dynamics hint extension toward 1.07 might be in scope
The Euro extended lower after a false breakout past the 1.12 figure, as expected. The currency has now broken upward-sloping support guiding gains against the US Dollar through December, hinting near-term pressure higher has been neutralized.
Making the case for broader bearish trend resumption probably requires further confirmation however. A daily close below the 1.1069-1.1104 congestion zone and a rising trend line connecting major swing lows since October – now at 1.1051 – seem like prerequisites on that score.
If this materializes, a move through the 1.0968-90 congestion area to challenge the swing low at 1.0879 may follow. A deeper selloff could be in the cards if long-term trend dynamics hold up however. The pace of the down move now in play implies an average drop of 4.6 percent, putting price just above 1.07.
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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.