EUR/USD—Continues to Digest Losses but will Short on a Bounce Higher

EUR/USD (1.1417)

• Resistance Levels: 1.1532, 1.1660, 1.1830
• Support Levels: 1.1275, 1.1185, 1.0969

Trade Strategy: Stand aside, enter short EUR trade on bounce higher

The euro is consolidating after hitting a bottom. On the daily MT 4 chart below, we note the formation of a Morning Star candlestick, which is bullish reversal signal plus the bullish divergence in the RSI.

The EUR/USD needs a close back above 1.1532, the high reached on February 3, to challenge 1.1660. Should the euro continue its retreat, there is a congestion area ranging from 1.1318 and ending at 1.1275. A break below this area challenges the technical support found at 1.1185.

Any correction higher by the EUR/USD will be corrective. My long-term outlook on the euro is bearish and I will enter a short euro trade on any bounce higher. Until I get my bounce, which should present a stronger trade opportunity, I will opt to stay flat and watch price movements.