After testing a high of 1?4352 on June 18, EUR has been loosing in value against USD, while moving within the descending channel hitting lower lows and lower highs all the way long.
The Fibonacci retracement indicator, applied to the high hit on July 10 and a low reached back on July 20 shows that 50% level has been rejected as well as the upper trendline of the channel. The price broke below the previous support level near 1.10 and currently it is acting as a resistance level that most likely is a supply area.
Consider selling EUR/USD today at the current rate, while it is near R1 (1.10). Fibonacci applied to the last wave up, the low reached on 20.07 and the high hit on 23.07 show three levels of support. It could be reasonable to scale down your short trade as/if pair reaches these supports, with the final target being near 1.03 (S4). The daily close above R1 (1.1017) could be used as a signal to close the short position and should only extend the consolidation. The current trend is likely to remain intact.
Support: 1.0677, 1.0468, 1.0259
The material has been provided by InstaForex Company – www.instaforex.com