The Euro Looks to test Below the 1.06 Handle

Points to consider with this euro article:

• The euro restarts it downtrend against the US Dollar and is gaining steam.
• Break of chart support could signal a test below 1.06.
• Trade strategy: Short EUR @1.0624

The EUR/USD Forex market is now vulnerable to moving lower hitting a new monthly low. Price action is now looking challenge below the 1.06 handle. The euro reversed direction and moved lower after completing a test above the 1.08 handle. This Forex market then formed a bearish rising wedge seen on the below daily MT 4 chart.

Euro Technical Analysis

Let’s discuss today’s euro technical analysis. There is near term technical support that lines up at 1.0642. A daily close below this first downside barrier challenges the next technical support layer at 1.0340.

The alternative technical analysis, notes an upside barrier that lines up at 1.0642. A break above this first upside barrier challenges the next technical resistance level that lines up at 1.0827.

Trade strategy

Now we can discuss today’s daily trade strategy in this Forex market. I have a short EUR sale in play, thanks to improved risk to reward conditions and a resumption of the downtrend. The short sale is at 1.0624. The first target lines up at 1.0622. I have placed the initial stop loss at 1.0527. Will activate on a daily close above this level.

Should the first target be met, I will book profit on half the trade, trail the stop loss to breakeven and leave the remainder of the trade open. This way, if there is further weakness here, I can take advantage.