To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

• EUR/USD Technical Strategy: Flat

• Support: 1.3800-31 (former resistance), 1.3744 (channel bottom)

• Resistance: 1.3892-1.3911 (Dec 27 high, 38.2% Fib exp.), 1.4045 (50% Fib exp.)

The Euro may be starting to send early signals of a reversal lower against the US Dollar. Prices put in a Shooting Star candlestick below resistance in the 1.3892-1.3911 area, marked by the December 27 high and the 38.2% Fibonacci expansion. The barrier is further reinforced by a rising channel top. Support is in the 1.3800-31 region, a former double top, with a slide back through that eyeing the channel bottom at 1.3744. Alternatively a break above resistance targets the 50% Fib at 1.4045.

Our long-term fundamental outlook favors the downside but a Shooting Star is not a concrete-enough signal to enter short. We will wait for confirmation on a daily close below the channel bottom to initiate the trade.

Confirm your chart-based trade setups with the Technical Analyzer. New to FX? Start Here!

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.