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Talking Points:
- EUR/USD Technical Strategy: Flat
- Euro Pausing to Digest Losses After Finding Support Above 1.11 Figure
- Lackluster Follow-Through, Choppy Ranges Make for Inconclusive Setup
The Euro paused to consolidate above the 1.11 figure against the US Dollar as expected after prices put in a bearish Dark Cloud Cover candlestick pattern. The pair appears to be increasingly struggling with directional conviction since spiking to a seven-month high in late August. Seemingly noteworthy technical breaks have been unable to find follow-through and sliding ATR readings are pointing to ebbing volatility.
Looking ahead, a break below horizontal shelf support at 1.1113 opens the door for a test of 1.1016, a barrier marked by a rising trend line in play since March and the August 18 low. Alternatively, a move above the September 24 high at 1.1296 clears the way for a challenge of the September 18 swing top at 1.1459.
Positioning is inconclusive at this point. Prices are oscillating in an increasingly choppy range, offering no actionable trade setups to compel us to take a trade. With that in mind, we will remain on the sidelines and wait for greater clarity to emerge before establishing exposure.
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