EUR/USD Technical Strategy: SHORT AT 1.2407
- Euro rejected at familiar trend line resistance once again
- Break of minor support exposes support below 1.22 figure
- Opting not to scale up exposure as Fed policy call looms
The Euro is struggling to find near-term directional conviction but overall chart positioning is still suggesting that the path of least resistance leads lower. Last week’s hint at bearish acceleration proved misleading but price action continues to be defined by a series of lower highs set from a double top formed below 1.26.
A break below the March 9 lowat 1.2273 has exposed the 38.2% Fibonacci retracement at 1.2173. A further breach below that confirmed on a daily closing basis targets the 1.2055-70 area (50% level, August 29 high). Alternatively, a move back above 1.2273 aims for a retest of trend line resistance, now at 1.2374
The second half of a short EUR/USD position from 1.2407 remains in play after initial profit was booked last week. It will remain in play to capture any further weakness, though scaling up exposure seems ill-advised as the FOMC rate decision looms ahead. The stop-loss will be triggered on a daily close above 1.2380.
EUR/USD TRADING RESOURCES
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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