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Talking Points:
- EUR/USD Technical Strategy: Pending short at 1.0955
- Euro recovery rejected at 12-month down trend line resistance
- Confirmation of reversal sought on short-term uptrend break
The Euro recoiled from twelve-month down trend resistance against the US Dollar, validating earlier signs of ebbing upside momentum. Confirmation of a larger top implying continuation downward is still pending however as prices test the bounds of the short-term uptrend.
A daily close below trend line support at 1.0934 opens the door for a test of the 23.6% Fibonacci retracement at 1.0862. Alternatively, a break above major resistance at 1.1002 (trend line, 76.4% Fib expansion) paves the way for a challenge of the 100% threshold at 1.1136.
Entering short looks increasingly compelling but risk/reward considerations argue against the trade for now. With that in mind, an entry order to sell EUR/USD at 1.0955 has been set up. If triggered on a bounce, the trade will initially target 1.0826 and have a stop-loss activated on a daily close above 1.1002.
What will determine where EUR/USD goes through mid-year? See our forecast to find out!
