EUR/USD Technical Strategy: BEARISH
- Euro recoils from 14-month downtrend resistance vs US Dollar
- Weekly chart hints prices setting the stage for a move sub-1.10
- Confirmation sought following the passing of critical event risk
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The Euro recoiled from resistance guiding it lower against the US Dollar since January 2018, as expected. Prices have now broken past key support in the 1.1216-34 area underpinning the choppy range capping losses since early November. That has exposed the next downside barrier in the 1.1110-32 zone.
Zooming out to the weekly chart, the picture looks still more ominous for the single currency. That reveals prices are on the verge of clearing a support shelf in play since mid-August. A successful breach faces relatively mild support thereafter until the 1.0829-1.0912 zone comes into play.
That seems to lay the groundwork for what may be a pronounced decline in the weeks and months ahead. Immediate event risk by way of US jobs data might limit immediate sellers’ conviction in the near term however, sapping follow-through. If the weekly close confirms a breakout however, that could change.
EUR/USD TRADING RESOURCES
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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