EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro rejected at chart resistance, eyeing a move to test October low
- November top break needed to neutralize near-term selling pressure
- Longer-term position hints move probing below 1.07 may be afoot
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The Euro recoiled from resistance in the 1.1069-80 price inflection area, pushing prices back toward monthly lows near support in the 1.0968-90 zone. A daily close below that is likely to set the stage for a test of the October 1 swing bottom at 1.0879.
Alternatively, a snapback upward that secures a foothold above 1.1080 – against on a closing basis – would probably open the door to challenge the 1.1176-83 could top anew. Follow-through higher beyond that might neutralize near-term selling pressure and set the stage for a longer-lasting recovery.
For the time being however, broader positioning still seems to telegraph a bearish bias. The pair’s breach below rising counter-trend support at the beginning of November appeared to suggest that a correction had run its course and the preceding downward trajectory was prepared to be reasserted.
Daily EUR/USD chart created with TradingView
Zooming out to the weekly chart, recent price action appears to put EUR/USD well within the downtrend carved out since mid-2018. If prior patterns are indicative, trend averages suggest the latest rejection at resistance portends a downswing on the order of 4.5 percent. That would put the pair below 1.07.
Weekly EUR/USD chart created with TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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