Near-term Technical Outlook: Trade Setups on EUR/USD, AUD/USD & USD/CAD
- Technical charts on trade setup we’ve been tracking in EUR/USD, AUD/USD &USD/CAD
- Euro testing key support near September lows
- Aussie at critical yearly open support zone
- USD/CAD breakout stalls – support into 1.32
An update on technical setups we've been tracking inEuro, Aussie & Loonie. These are the targets and invalidation levels that matter heading into the US Presidential Elections and key central bank rate decisions this week. Review my latest Strategy Webinar for an in-depth breakdown of thesetrade setups and more.
Euro Price Chart – EUR/USD 120min
Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview
In last week’s Euro Price Outlook we highlighted, “Key resistance / bearish invalidation remains steady at 1.1853/59– a region defined by the 100% extension of the late-September advance and the 61.8% Fibonacci retracement of the September range.” EUR/USD continued to respect this zone on a close basis with price briefly registering a high at 1.1880 before turning lower into the close of October.
Bottom line: That decline is now testing a key support zone at the October 2018 high / 61.8% extension at 1.16.21/33. Initial resistance now back at the 1.17-handle backed closely by the October open at 1.1719- both regions of interest for possible topside exhaustion IF reached. Bearish invalidation now lowered to 1.1786. A break lower from here exposes the lower parallel, currently near 1.1580 with critical confluence support eyed at 1.1482/99.Review my latest Euro Weekly Price Outlook for a look at the longer-term GBP/USD technical trade levels.
Euro Trader Sentiment – EUR/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-short EUR/USD - the ratio stands at -1.04 (49.10% of traders are long) – neutral reading
- Long positions are22.39% higher than yesterday and 61.17% higher from last week
- Short positions are12.96% higher than yesterday and 33.96% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse lower despite the fact traders remain net-short.
| Change in | Longs | Shorts | OI |
| Daily | -1% | -4% | -3% |
| Weekly | 4% | -10% | -5% |
Australian Dollar Price Chart - AUD/USD Daily
Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview
In my most recent Australian Dollar Technical Price Outlook we noted that AUD/USD, “carving the weekly opening-range just below the monthly open / downtrend resistance – look to the breakout for guidance,” with the broader risk for a deeper setback while below the September trendline. An outside-day reversal off monthly open resistance at 7160 last week takes Aussie back into key support here at 7016/42- looking for infection off this threshold heading into the elections with a break / close below needed to keep the short-bias viable heading deeper into November. Subsequent support objectives at 6963 and the 100% extension at 6835.
Bottom line: Aussie is testing a major support inflection zone here with the broader September downtrend still in play while below 7160. Review my latest Aussie Weekly Price Outlook for a look at the longer-term AUD/USD technical trade levels.
Canadian Dollar Price Chart - USD/CAD 120min
Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview
In my latest Canadian Dollar Price Outlook we noted that USD/CAD was approaching, “critical support at 1.3046/56. Ultimately, we’re looking for basing this week with a breach above this formation needed to shift the focus higher again in the US Dollar.” The decline never reached that threshold with USD/CAD turning off the 78.6% retracement at 1.3085 into the close of October trade. The recovery failed last week at confluence resistance at 1.3375/82 and the focus is on this pullback heading into a heavy week of event risk.
Bottom line: Support rests at the lower parallel / 61.8% retracement at 1.3199- look for a reaction there IF reached with a close below 1.3156/62 ultimately needed to mark resumption of the broader downtrend. Weekly open resistance at 1.3313 with a breach higher keeping the focus on 1.3450. Review my latest Canadian Dollar Weekly Price Outlook for a closer look at the longer-term USD/CAD technical trading levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
-Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex
