Euro remains bearish Despite Correction Higher

Points to consider in the euro Forex article:

• Euro posts the largest two day rally in six months against the US Dollar.
• Waiting on the correction to end to place another desired short EUR sale.
• Trade strategy: Stand aside

The EUR/USD Forex market has seen its best two day rally in six months and is currently digesting these gains below the key pivot at 1.08. Price action did turn higher as we expected. The euro found support above 1.05 and found some fuel for a correction higher thanks to the failed referendum vote in Italy on Sunday. Please refer to the below daily MT 4 chart for today’s daily technical analysis.

Euro Technical Analysis

Let’s discuss today’s daily technical analysis in this forex market. A daily close above 1.0768 challenges the next upside barrier, former support level, that lines up at 1.0850. This is also the October 25 low. The alternative euro technical analysis, notes the first downside barrier lining up at 1.0668. A break below here, challenges the next technical support level, the long term support shelf that lines up in a congestion area. This area is at 1.0461 to 1.0520.

Trade Strategy

Now let’s discuss today’s daily trade strategy. I did have a short EUR sale at 1.07. I booked the initial profit but the remaining sale closed after rising through break even. Right now, the overall trend in this Forex market remains to the downside. I will sit on the sidelines until another short EUR sale comes along. For now, I am flat in this Forex market.

There is also event risk today as the European Central Bank will announce its rate decision. The ECB is also expected to announce they are extending their current bond buying program by six months. This should lead to volatility, hence adding support to standing aside for now.