EUR/USD Responds to Initial Support- Recovery to Offer Opportunity
To receive Michael’s analysis directly via email, please SIGN UP HERE
- EURUSD rebounds off initial H&S support target- outlook bearish sub-1.1780
- Check out our 4Q EUR/USD projections in our Free DailyFX Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
EUR/USD Daily Chart
Technical Outlook: EURUSD broke below a critical support confluence last month at 1.1679- ‘a region defined by the lower median-line parallel, the 23.6% retracement of the 2017 range and the 100-day moving average.’ The subsequent decline has taken out our initial support targets with price rebounding yesterday of the head & shoulders measured move at 1.1554.
Daily momentum divergence suggests the immediate short-bias may be at risk here but the broader focus remains weighted to the downside while below confluence median-line resistance ~1.1780s. A break lower from here targets the 2016 high-day close at 1.1495 backed by a critical support confluence at 1.1400/23.
Why does the average trader lose? Avoid these Mistakes in your trading
EUR/USD 240min Chart
Notes: A closer look at near-term price action highlights a precise rebound off the 1.1554 target yesterday with initial resistance eyed at 1.1616 backed by our near-term bearish invalidation level at monthly open at 1.1646. A breach / close above this threshold would suggest a larger recovery is underway with such as scenario targeting objectives at 1.1725and critical resistance at 1.1788.Bottom line: the immediate risk is for some near-term recovery but ultimately, I’d be looking to fade strength while below the median-line.
Join Michael on Friday for his bi-weekly Live Webinar on the Foundations of Technical Analysis- Register for Free Here!
- A summary of IG Client Sentimentshows traders are net-short EURUSD- the ratio stands at -1.53 (39.5% of traders are long) – bullishreading
- Long positions are 2.8% higher than yesterday and 12.9% higher from last week
- Short positions are 4.2% lower than yesterday and 6.8% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week andrecent changes in sentiment warn that the current EURUSD price trend may soon reverse lower, despite the fact traders remain net-short.
See how shifts in EUR/USD retail positioning are impacting trend- Click here to learn more about sentiment!
Relevant Data Releases
Check out this week’s DailyFX Webinar Schedule
Other Setups in Play
- Crude Oil Price Analysis- Breakout Targets to Know
- Weekly Technical Outlook: USD Crosses Eye Make or Break Levels
- USD/JPY Eyes Key 2017 Resistance Hurdle Ahead of NFP Report
- GBP/USD Rebound to Face FOMC, BoE, NFP- Levels to Know
- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at firstname.lastname@example.org.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.