EUR/USD Technical Analysis: Euro Aims to Test 1.1200

EUR/USD Technical Analysis: Euro Aims to Test 1.1200

17 May 2016, 19:07
Mohammad Soubra
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EUR/USD Technical Analysis: Euro Aims to Test 1.1200


 Talking Points:


  1. EUR/USD Technical Strategy: Short at 1.1317
  2. Euro vulnerable to deeper losses after largest 2-day drop in a month
  3. 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.

 


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