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Talking Points:
- EUR/USD Technical Strategy: Flat
- Support: 1.2668, 1.2534, 1.2316
- Resistance:1.2852, 1.2931, 1.3070
The Euro is in a precarious position after bouncing as expected against the US Dollar having formed a bullish Piercing Line candlestick pattern. Prices are testing support in the 1.2668-1.2712 area (channel bottom, 14.6% Fibonacci expansion), with a daily close below that exposing the 1.2500-34 zone (October 3 low, 23.6% level). Alternatively, a reversal above the 23.6% Fib retracement at 1.2852 opens the door for a test of the channel top at 1.2931.
We are aiming to re-enter short in line with our long-term fundamental outlook. Confirmation of bearish trend resumption is absent for now however and risk/reward parameters are skewed against entering a trade as prices sit squarely at support. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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