Forex: EUR/USD Technical Analysis – Euro Short Trade Pending
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Talking Points:
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.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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