Talking Points:
The Euro continued to recover for a second consecutive day, with prices poised to challenge monthly highs. Near-term resistance is in the 138.85-139.17 area (August 12 high, 38.2% Fibonacci expansion), with a break above that on a daily closing basis exposing the 50% level at 139.83. Alternatively, a move below the 23.6% Fib expansion at 138.36 clears the way for a test of the 14.6% expansion at 137.86.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for an actionable opportunity to present itself.