The Euro continues to push upward having rebounded against the US Dollar as expected, hitting the highest level in a month and establishing a foothold above the 1.10 figure. The single currency launched upward following last week’s underwhelming ECB monetary policy announcement.
Near-term resistance is at 1.1117, the 50% Fibonacci retracement. A break above that on a daily closing basis opens the door for a challenge of 1.1257, the intersection of the 61.8% level and a falling trend line set from late August. Alternatively, a move back below resistance-turned-support at 1.0976, the 38.2% Fib, paves the way for a move to the 1.0802-18 area marked by the May 27 low and the 23.6% retracement.
The medium- and long-term EUR/USD trends continue to favor the downside. That paints the current upswing as corrective, suggesting it represents an on-coming selling opportunity rather than something to be chasing upward. With that in mind, we will remain on the sidelines and wait for an actionable short trade setup to emerge.
Near-term resistance is at 1.1117, the 50% Fibonacci retracement. A break above that on a daily closing basis opens the door for a challenge of 1.1257, the intersection of the 61.8% level and a falling trend line set from late August. Alternatively, a move back below resistance-turned-support at 1.0976, the 38.2% Fib, paves the way for a move to the 1.0802-18 area marked by the May 27 low and the 23.6% retracement.
The medium- and long-term EUR/USD trends continue to favor the downside. That paints the current upswing as corrective, suggesting it represents an on-coming selling opportunity rather than something to be chasing upward. With that in mind, we will remain on the sidelines and wait for an actionable short trade setup to emerge.