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- EUR/USD Technical Strategy: Pending Short
- Support: 1.3709 (38.2% Fib ret.), 1.3690 (channel floor)
- Resistance: 1.3840 (channel top)
The Euro turned down against the US Dollar as expected, edging lower within the confines of a falling channel. Near-term support is at 1.3709, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis exposing the channel bottom, now at 1.3690. The first layer of significant resistance lines up at 1.3840, the channel top.
While our long-term fundamental outlook favors Euro weakness, we will opt against entering the trade for now. The pair faces high-profile event risk in the form of the ECB monetary policy announcement in the hours ahead. The result of the sit-down may dramatically alter positioning and we will opt to wait for it and the subsequent press conference from central bank President Mario Draghi to pass to reassess the situation.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com