DailyFX.com -
EUR/USD Technical Strategy: SHORT AT 1.2407
- Five-day Euro upswing seems to be corrective within a larger down move
- Shooting Star candle at former support, 4-hour reversal hint swing top set
- Reactivated EUR/USD short trade aims for support test below 1.24 mark
How will the ECB impact the EUR/USD chart setup? Join the webinar to follow the rate decision live !
The Euro has managed a five-day winning streak against the US Dollar but gains may prove to be corrective, giving way to downward resumption. Tellingly, prices put in a Shooting Star candle on a retest of former trend line support, hinting at indecision and warning that a reversal may be around the corner.
Zooming in to a four-hour chart (see below), a break of the near-term series of higher highs and lows seems to suggest that the upswing from March lows has lost momentum. Negative RSI divergence bolsters the case for the formation of a swing top and an on-coming downturn.
Last week's order to short EUR/USD at 1.2277 was filled but the position was subsequently stopped out on a daily close above 1.2329. Bearing in mind the current setup, the trade has been re-established at 1.2407 . It initially targets 1.2350 and carries a stop-loss to be activated on a daily close above 1.2445.
EUR/ USD TRADING RESOURCES
- Just getting started? See our beginners' guide for FX traders
- Having trouble with your strategy? Here's the #1 mistake that traders make
- Join a free Trading Q&A webinar and have your questions answered
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
To receive Ilya's analysis directly via email, please SIGN UP HERE
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from IG .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.