Talking Points:
- EUR/USD Technical Strategy: Flat
- Euro bounce continues as back-to-back gains yield largest rally in 2 months
- Prices closing in on trend-defining resistance level above 1.13 vs. US Dollar
The Euro continued
to push sharply higher against the US Dollar, delivering the single
currency its largest two-day advance since early December. Prices now
approach a pivotal upward-sloping barrier set from mid-March defining
whether recent gains are corrective or the start of a new near-term
trend.
Near-term resistance is in the
1.1290-1.1336 area, marked by the 61.8% Fibonacci expansion and the
aforementioned trend line, with a break above that on a daily closing
basis targeting the 76.4% level at 1.1473. Alternatively, a move back
below the 50% Fib at 1.1143 paves the way for a test of the 38.2%
expansion at 1.0995.
The long-term EUR/USD trend remains bearish and our 2016 fundamental outlook calls
for continuation of more of the same ahead. With that in mind, we will
remain on the sidelines until the current upswing runs its course and
look for the emergence of an actionable selling opportunity to become
involved.
