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EUR/USD: Looking for Opportunities to Buy Dips Heading Into U.S. ISM

EUR/USD: Looking for Opportunities to Buy Dips Heading Into U.S. ISM

Michael Boutros, Strategist

Talking Points

  • EUR/USD eyeing near-term resistance ahead of U.S. ISM Services
  • Updated targets & invalidation levels

EURUSD 120min

Chart Created Using TradingView

Technical Outlook: EURUSD is trading within the confines of a median-line formation extending off the June / July lows with today’s rally now testing a key Fibonacci confluence at 1.1228/31. The immediate topside bias is vulnerable here but the trade remains constructive while above a pair of parallels which converge on the weekly opening-range low at 1.1155.

A breach higher targets the median-line parallel extending off the December low (~1.1250) backed by the descending upper median-line parallel extending off the yearly high (~1.1285).From a trading standpoint, I would be looking to fade euro weakness on a move lower with a break below 1.1076 needed to shift the broader focus back to the downside lower. For the complete setup and to continue tracking this trade& 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 short EURUSD- the ratio stands at -2.01(33% of traders are long)-bullishreading
  • Yesterday the ratio was -1.81. Short positions are 8.0% higher than yesterday and 53.7% above levels seen last week.
  • Open interest is 4.2% higher than yesterday and 14.5% above its monthly average.
  • SSI flipped to net short on last week as the exchange rate rebounded off structural support- constructive. An increase in long exposure on building open interest keeps the long-bias in play. That said, the pair is coming into key near-term resistance with the risk for a pullback before rallying to new highs

Help fine-tune you entries, click here to learn more about the DailyFX Grid Sight Index (GSI)

Relevant Data Releases This Week

Other Setups in Play:

Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list

Join Michael for Live Scalping Webinars on Mondays on DailyFX and Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET)

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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