EUR/USD Plays Out Cautious Upward Correction
- EUR/USD Technical Strategy: Short at 1.1224
- Euro Finds Interim Support, Rebounds After 1-Month Trend Line Break
- Short Position Now in Play, Initially Targeting Return Below 1.12 Figure
The euro is playing out a cautious upward correction against the US dollar having found support below the 1.12 figure. Prices broke through rising trend line support defining the rising trend from early August late last week, suggesting the longer-term down trend may be reasserting itself.
From here, a daily close below the 38.2% Fibonacci expansion at 1.1118 opens the door for a challenge of the 50% level at 1.1052. Alternatively, a push through rising trend line support-turned-resistance – now at 1.1274 –clears the way for a test of the September 1 high at 1.1331.
We set up an entry order to sell EUR/USD at 1.1224 last week. The trade has now been triggered and we are holding short, initially targeting 1.1118. A stop-loss will be activated on a daily close above 1.1331. We will book profit on half of the position and move the stop-loss to the breakeven level once the first objective is reached.
EUR/USD Daily Chart