The Euro continues its Selloff and Short Sale Goes Live

Points to consider in this euro article:

• Euro digests losses after breaking the March 2015 support level.
• Brief correction higher activates short EUR sale below 1.05.
• Trade strategy: Short EUR @1.0477

The EUR/USD Forex market has paused its selloff to consolidate after hitting a new 14 year low. This is following the recent Federal Reserve monetary policy decision to raise rates and steepen its rate hike path in 2017. There was a break of the March 2015 support, see below MT 4 chart, before consolidating and a small recovery. This suggests the selloff will start again.

Euro Technical Analysis

Let’s discuss today’s daily euro technical analysis. There is near term support lining up at 1.0341. A daily close below this first downside barrier challenges the next technical support level that lines up at 1.0224. The alternative euro analysis, notes the first upside barrier within a congestion zone. This area runs to the March 13, 2015 low and lines up at 1.0445 to 1.0560. A break above this level challenges another congestion area running from the April 13, 2015 low. This area lines up at 1.0520 to 1.0544.

Trade Strategy

Now let’s discuss today’s trade strategy. The short-lived correction higher provided an opportunity to enter a short EUR sale at 1.0477. The first target is at 1.0341 and the stop loss is at 1.0544. This will activate on a daily close basis. I will trail the stop loss to break even and book half the trade profits if the first target is reached.