EUR/USD Technical Analysis: Euro Aims to Test 1.1200
- EUR/USD Technical Strategy: Short at 1.1317
- Euro vulnerable to deeper losses after largest 2-day drop in a month
- Short position entered, aiming for descent to challenge the 1.12 figure
The Euro appears vulnerable to deeper losses against the US Dollar after the single currency suffered the largest two-day loss in a month. Prices turned lower as expected after putting in a Shooting Star candlestick having found resistance above the 1.16 figure.
Near-term support is in the 1.1196-1.1215 area (38.2% Fibonacci retracement, April 25 low, with a break below that on a daily closing basis opening the door for a test of the 50% level at 1.1067. Alternatively, a reversal above the 23.6% Fib at 1.1357 paves the way for a challenge of the 14.6% retracement at 1.1456.
Technical positioning appears indicative of further weakness and risk/reward parameters seem acceptable to trade that expectation. As such, a short position has been triggered at 1.1317, initially targeting 1.1215. A stop-loss will be activated on a daily close above 1.1370, the May 10 close. Half of the position will be closed and the stop-loss adjusted to breakeven when prices hit the first objective.