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The Euro declined against the US Dollaras expected, breaking rising channel set from early February and pushing below the 1.38 figure. The pair is now testing the 38.2% Fibonacci retracement at 1.3779, with a conclusive break downward exposing the 50% level at 1.3721. Alternatively, a reversal back above the 1.38 mark aims for the 23.6% Fib at 1.3850.
Prices are too close to relevant support to justify a short position in line with our long-term fundamental outlook from a risk/reward perspective. We will remain flat for now, waiting for a more attractive setup to present itself.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com