Post-NFP EUR/USD Breakout Eyes June High
Recent price action in EUR/USD raises the risk for a larger recovery as the exchange rate breaks out of a near-term holding pattern, with euro-dollar at risk of extending the advance from earlier this month as it carves a fresh series of higher highs & lows.
The reaction to the U.S. Non-Farm Payrolls (NFP) report brings the topside targets back on the radar as both price and the Relative Strength Index (RSI) snap the downward trend from earlier this year, and EUR/USD may exhibit a more bullish behavior over the near-term as the retail crowd appears to going against the recent advance in the exchange rate.
The IG Client Sentiment Report shows the number of traders net-long EUR/USD is 0.3% higher than yesterday and 11.5% lower from last week, while the number of traders net-short is 1.2% lower than yesterday and 13.2% higher from last week. The recent shift in retail positioning suggests the crowd is looking for range-bound conditions as euro-dollar approaches the June-high (1.1852), but the fact traders are now net-short EUR/USDraises the risk for a larger rebound in the exchange rate as a bullish sequence takes shape. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!
EUR/USD Daily Chart
EUR/USD snaps the wedge/triangle formation following the failed attempts to break/close below the 1.1510 (38.2% expansion) region, with the June-high (1.1852) on the radar as the pair carves a fresh series of higher highs & lows. Need a close above the 1.1810 (61.8% retracement) region to favor a larger recovery, with the next area of interest coming in around 1.1960 (38.2% retracement) to 1.1970 (23.6% expansion).
For more in-depth analysis, check out the Q3 Forecast for the Euro
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--- Written by David Song, Currency Analyst
Follow me on Twitter at @DavidJSong.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.