EUR/USD Price Analysis: Bullish Outlook Mired by Slope Resistance

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• EURUSD immediate focus is on a break of the 1.18-1.1977 range- (breach favored)
• Check out our 4Q EURUSD projections in our Free DailyFX Trading Forecasts
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EUR/USD Daily Chart

Technical Outlook: EURUSD broke above down-channel resistance (red) on November 14th with the subsequent test and rebound off that slope validating a break of the monthly opening-range highs. The rally stalled at the 1.1947/77 resistance barrier this week and the focus remains on a breach of this threshold to mark resumption of the broader up-trend targeting 1.2167. Interim support and bullish invalidation rests at 1.1790 where the 100-day moving average converges on the 11/15 reversal-day close.

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EUR/USD 240min Chart

Notes: A closer look at price action shows the pair continuing to trade within the confines of a well-defined ascending channel formation with Euro rebounding off the lower parallel today in U.S. trade. The advance is now testing weekly open resistance at 1.1924. We’re likely to see some kickback from here, but the near-term outlook remains weighted to the long side while within this formation with a break higher targeting the 78.6% retracement / slope resistance at 1.1977/85- a breach above this region is needed to clear the way for a larger advance with such a scenario targeting the yearly high-day close at 1.2043 backed by the 2017 high at 1.2092.

Bottom line: Look for a break of the 1.790-1.1977 range for near-term guidance. We’ll favor fading weakness while above 1.1800 with a breach above downslope resistance (blue) needed to mark resumption.

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• A summary of IG Client Sentiment shows traders are net-short EURUSD- the ratio stands at -1.56 (39.1% of traders are long) – bullishreading
• Long positions are 0.3% lower than yesterday and 17.8% higher from last week
• Short positions are 7.4% lower than yesterday and 15.1% lower 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 & compared with last week and recent changes in positioning 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!

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Relevant Data Releases

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Other Setups in Play

• GBP/USD Breakout Faces First Hurdle- Bullish Above November Open
• EUR/NZD Carves Double Top Formation into Resistance
• AUD/USD Short-Term Indecision into Long-Term Direction
• Weekly Technical Outlook: Key Setups in Play Heading into Monthly Close

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com