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Prices are consolidating above support at 0.8848, the December 2013 closing bottom. Near-term resistance is at 0.8926, the intersection of the 23.6% Fibonacci retracement and a falling trend line set from late January. Breaking above that aims for 0.8970, the 38.2% level. Alternatively, a break below support aims for the December 27 low at 0.8798.
Narrow range-bound trading conditions do not offer a clear-cut directional trade setup. From a risk/reward perspective, prices are too close to support to justify a short. On the other hand, a defined bullish reversal signal is absent for now. We will remain flat until something actionable materializes.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com