Talking Points
- The EUR/USD is attempting to break support under 1.0736
- New lows open the pair up to test December lows
- Bullish reversals begin over 1.0780
(Created using Marketscope 2.0 Charts)
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The EUR/USD is attempting to break lower for the third straight trading session this morning. Prices for the pair are currently hovering above today’s S4 Camarilla pivot point, which is found at a price of 1.0736. A decline below this value would be significant, as the EUR/USD would be breaking to a new weekly low. A move to this point, along with the creation of a lower low; longer-term swing traders may again choose to focus on the December 2015 low at 1.0516. In the short term, traders looking for a breakout may extrapolate a 1-x extension of today’s 90 pip trading range to target prices near 1.0645.
In the event that the US Dollar fails to rally this morning, traders may begin looking for a reversal on the EUR/USD above the S3 pivot found at 1.0780. A retracement back above this point would at least temporarily nullify any bearish momentum found for the pair. In this scenario, traders may begin to target values of resistance including today’s R3 pivot found at 1.0872 and the R4 pivot at 1.01918.
Traders tracking sentiment should note that SSI (Speculative Sentiment Index) for the EUR/USD currently reads at +1.1240. While this value is far from extreme, it is significant that net positioning is now turning positive for the first time since early December. Traders should continue to monitor sentiment at this point, and any further extremes can be used to validate the markets chosen direction.
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