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Talking Points:
- EUR/USD Technical Strategy: Flat
- Euro may be carving out a top near 1.15 figure vs. US Dollar
- Confirmation needed for an actionable short trade opportunity
The Euro put in a bearish Dark Cloud Cover candlestick below the 1.1500 threshold against the US Dollar, hinting a move lower may be in the cards. Negative RSI divergence hints at ebbing upside momentum and bolsters the case for a downside scenario.
Near-term support is in the 1.1285-1.1313 area (former resistance, July 5 low), with a break below that on a daily closing basis opening the door for a test of the 38.2% Fibonacci retracement at 1.1138. Alternatively, a push above the 1.1490-1.1519 zone (July 12 high, 23.6% Fib expansion) targets 1.1616 (May 2016 high).
While the technical argument for a downturn seems compelling, confirmation remains elusive while the series of higher highs and lows set from mid-April remains intact. Furthermore, sentiment studies continue to argue for an upside bias. With that in mind, staying flat seems most appealing for now.
Where will the Euro go in the next three months? See our forecast here!
