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Talking Points:
- EUR/USD Technical Strategy: Flat
- Support: 1.3800-31 (former resistance, channel floor), 1.3747 (38.2% Fib ret.)
- Resistance: 1.3892-1.3911 (Dec 27 high, 38.2% Fib exp.), 1.3948 (channel top)
The Euro continues to test resistance in the 1.3892-1.3911 area, marked by the December 27 high and the 38.2% Fibonacci expansion. A still-valid (albeit barely so) Shooting Star candle may yet precede a reversal lower. Breaking below support in the 1.3800-31 area initially exposes 1.3747, the 38.2% Fib retracement. A push above 1.3911 targets a rising channel top at 1.3948.
Our long-term fundamental outlook favors Euro weakness but an actionable entry signal remains absent for the time being. With that in mind, we will stand aside, waiting for a break of the channel floor to offer confirmation for a short position.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com