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Prices edged lower as expected after producing a Doji candle below resistance at 0.9038, the 38.2% Fibonacci expansion. From here, a break below the 23.6% Fib at 0.8986 on a daily closing basis targets a rising trend line set from mid-December, now at 0.8957. Alternatively, a turn above 0.9038 aims for the 50% Fib at 0.9081.
On balance, prices are wound up in to a narrow congestion range, with little by way of actionable trade setups clearly apparent. Entering short with the pair in close proximity to support is unattractive from a risk/reward perspective, while trying long lacks confirmation of reversal. We will stand aside for now until something palatable emerges.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com