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The Euro continued to sink for a fifth consecutive day having produced a double top below the 1.40 figure against the US Dollar. Support is now in the 1.3673-86 area, marked by the 61.8% Fibonacci retracement and the bottom of a rising wedge chart formation in play since late last year. A break downward on a daily closing basis exposes the 76.4% level at 1.3598. Alternatively, a reversal back above the 50% Fib at 1.3734 targets the 38.2% retracement at 1.3795.
We are looking to enter short in line with long-term fundamental outlook but the pair is too close to relevant support to justify a trade from a risk/reward perspective. We will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com