EUR/USD Battle Lines Drawn Ahead of ECB- Levels To Know
Chart Created Using TradingView
Technical Outlook: EURUSD has been trading within the confines off a well-defined descending median-line formation extending off the yearly highs, with an embedded pitchfork off last week’s high keeping the near-term focus lower. With that said, the pair is now approaching confluence Fibonacci support at 1.0975/80.
Heading into tomorrow’s European Central Bank (ECB) interest rate decision, look for near-term resistance at the weekly open / 61.8% ext at 1.1050/51 and theupper parallel. A breach through the monthly open at 1.1106 would be needed to shift the broader focus back to the long-side of the euro.
A break below near-term support targets the median-line backed by the 88.6% retracement at 1.0941 & the 100% extension at 1.0909. From a trading standpoint, I would be looking to fade weakness into this region on an ECB sell-off. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Deskand take advantage of the DailyFX New Subscriber Discount.
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- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net long GBPJPY- the ratio stands at +1.16(54% of traders are long)-weak bearishreading
- Yesterday the ratio was +1.15. Long positions are 1.8% higher than yesterday and 35.7% above levels seen last week.
- Open interest is 1.3% higher than yesterday and 10.9% above its monthly average.
- A flip to net-long keeps the focus lower with an increase in long-exposure coming alongside a build in open interest suggesting that the immediate risk remains for additional losses heading into tomorrow’s ECB rate decision.
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Relevant Data Releases This Week
Other Setups in Play:
- GBP/JPY at Brexit Levels- Elevated Risk for Declines on UK Employment
- GBP/USD Post-Brexit Rebound Eyes July High Ahead of UK CPI
- Webinar: USDOLLAR Threatens Breakout- Here are the Crosses to Watch
- USD/CHF Back Into the July Open- Bulls Look to U.S. CPI for Fuel
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---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.