Euro cap on the roof of the canal, threatening line against trend
Break break opens the door for a support test below 1.22
Invalidity point of bearish bias established above 1.24
See our free guide to learn how you can build confidence in your EUR / USD business strategy!
The euro is testing short-term key support against the US dollar, with a break that opens the door to the resumption of a two-month downtrend. The price action has been defined by a choppy descending channel since a double ceiling was carved below the figure of 1.26 at the end of January until mid-February.
A daily close below the trend line support that guides the latest rally, now at 1.2288, paves the way for another 38.2% Fibonacci retracement challenge at 1.2173. Alternatively, a push resistance above the range of 1.2446 would also break the top of the channel and expose the 1.2537-8 area (38.2% fiber retraction, double top).
The second half of a short EUR / USD trade unleashed at 1.2407 remains in play after partial gains were recorded in the first objective of the position, seeking to take advantage of the resumption of the bearish trend. A stop loss will be triggered in a daily close above 1.2446. Expansion opportunities will be evaluated as they appear. COMMERCIAL RESOURCES EUR / USD Just getting started? See our beginners guide for FX traders Do you have problems with your strategy? This is the # 1 mistake traders make Join a free trade Q and A seminar and have answers to your questions --- Written by Ilya Spivak, currency strategist for DailyFX.com