Ilya Spivak, of DailyFX.com, takes a technical look at how the euro declined against the dollar and explains that prices are now wedged too closely between near-term support and resistance levels to justify taking a trade in line with his long-term outlook from a risk/reward perspective.
- EUR/USD Technical Strategy: Flat
- Support: 1.1242, 1.1104, 1.0992
- Resistance:1.1327, 1.1463, 1.1565
The euro declined against the US dollar as expected after negative RSI divergence hinted at ebbing upside momentum. A daily close below the 23.6% Fibonacci retracement at 1.1242 exposes the 38.2% level at 1.1104. Alternatively, a turn above the 14.6% retracement at 1.1327 opens the door for a challenge of the 38.2% Fib expansion at 1.1463.
Prices are wedged too closely between near-term support and resistance levels to justify taking a trade in line with our long-term outlook from a risk/reward perspective. With that in mind, we will continue to stand aside until a more attractive opportunity presents itself.
Daily Chart—Created Using FXCM Marketscope
Click to Enlarge
By Ilya Spivak, Currency Strategist, DailyFX.com
