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EUR/USD Trades to New 2017 Highs

EUR/USD Trades to New 2017 Highs

Walker England, Forex Trading Instructor

Talking Points:

  • EUR/USD Trades to New 2017 Highs
  • Technically EUR/USD is in a short-term uptrend, despite trending down long term
  • Sentiment Figures remain off of extremes, reading at -1.70

The EUR/USD has started Mondays trading pushing to new 2017 highs at 1.0754. With today’s rally, the EUR/USD has now risen as much as 414 pips from the current 2017 low at 1.0340. Technically the pair remains bullish in the short term, as the EUR/USD remains trading above its 10 day EMA (exponential moving average). This line is currently acting as short-term support for the pair and found at 1.0647.

On a longer-term basis, the EUR/USD is still arguably in a downtrend as the pair trades below its 200-day MVA (Simple Moving Average). While the 200-day average at 1.1022 remains a critical point of resistance, traders will next look for the EUR/USD to clear the December 8 high at 1.0873. Failure to trade beyond this point would help classify this short-term bull run as a retracement in an otherwise downtrend.

EUR/USD Trades to New 2017 Highs

(Created Using TradingView Charts)

Lastly, Sentiment values for the EUR/USD remain off of extremes, with SSI now reading at -1.70. This reading places 63% of positioning short the EUR/USD, with 37% short. With more positioning short than long, this typically reads as a bullish signal. If the EUR/USD continues to rise, traders may expect sentiment values to continue to decrease. It should be noted that a bullish SSI total of -2.0 would be considered extreme, this would represent twice the positioning short relative to long. In the event that the EUR/USD declines, traders may reasonably expect SSI readings to level out at more neutral values.

EUR/USD Trades to New 2017 Highs

--- Written by Walker, Analyst for DailyFX.com

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