A Euro Recovery in the Works?

Points to consider in this euro article:

• Euro sees nice gains. Best gain in nearly 3 months as it breaks the near-term down-trend.
• Closing the remaining short EUR trade.
• Trade strategy: Stand aside

The EUR/USD Forex market has turned higher after finding support at a seven month low below the 1.09 pivot level. Price action has now broken a series of lower highs that began back in September. The longer-term outlook for the euro remains bearish and will look to reestablish a short EUR trade when I can.

Euro Technical Analysis

Let’s talk about today’s EUR/USD daily technical analysis. There is near term resistance lining up at 1.1047. A Daily close above this first upside barrier challenges the cluster zone that runs to the August 31 low. This technical resistance level lines up at 1.1110 to 1.1122. The alternative euro analysis, notes technical support lining up at 1.0972. A break below this first downside barrier challenges 1.0925.

Trade Strategy

Let’s talk trade strategy in this Forex market. I had a short EUR trade at 1.1208. I booked half the profits and had left the remainder of the trade open to capture further weakness. I will now close the trade as there are credible signs of a larger correction higher. I will stand aside until another short EUR sale presents itself. For now I am flat in this Forex market.

There is quite a bit of event risk this week with this Forex market and with the US Dollar. The FOMC is holding its monetary policy meeting this Wednesday. There is also data on the calendar with the non-farm payroll report on Friday as well as the unemployment rate. The Fed’s preferred inflation indicator also comes out, the PCE Inflation number. This will give us some insight into what the Federal Reserve Board will likely do at the December policy meeting.