- EUR/USD tests up-trend support- Breach of near-term downtrend needed to mark resumption
- Check out our 2018 EUR/USDquarterly projections in our Free DailyFX Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
EUR/USD Daily Price Chart
Technical Outlook: Euro turned just ahead of the key 61.8% retracement of the 2014 decline at 1.2598 with the pullback now eyeing near-term confluence support around the 1.23-handle. Note that daily momentum has broken back from overbought territory and is now testing a basic support trigger- a break below this threshold alongside a move sub-1.23 would suggest that a more significant near-term high is in place.
That said, look for interim resistance at the yearly high-day close at 1.2393-1.2409 with a break there needed to shift the near-term focus back toward the yearly highs at 1.2538 and the 1.2598 resistance target.
New to Forex Trading? Get started with this Free Beginners Guide
EUR/USD 240min Price Chart
Notes: A closer look at price action sees prices trading within the confines of a descending pitchfork formation extending off the yearly highs with the median-line converging on up-slope support around the 1.2297-1.2310 - Look for a reaction there.
Why does the average trader lose? Avoid these Mistakes in your trading
Bottom line: Euro is heading into up-trend support near the 1.23-handle with our broader bullish invalidation level set to the 38.2% retracement which converges on a slope confluence around 1.2225. While the immediate risk is lower, from a trading standpoint, I’llfavor buying a dip into structural support or a breakout & retest of the upper parallel / 1.2409 resistance level.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis mini-series
EUR/USD IG Client Sentiment
- A summary of IG Client Sentiment shows traders are net-short EURUSD- the ratio stands at -2.02 (33.1% of traders are long) – bullishreading
- Retail has remained net-long since Apr 18th; price has moved 16.8% higher since then
- Long positions are 5.2% lower than yesterday and 17.0% lower from last week
- Short positions are 9.5% lower than yesterday and 1.3% 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. Retail is less net-short than yesterday but more net-short from last week. The combination of current positioning and recent changes gives us a further mixed EURUSD trading bias from a sentiment standpoint.
See how shifts in EUR/USD retail positioning are impacting trend- Click here to learn more about sentiment!
Relevant EUR/USD Data Releases
---
Other Setups in Play
- The Return of Volatility: Weekly Technical Outlook
- AUD/USD Price Rally Vulnerable Ahead of FOMC, NFP
- Bitcoin Price Breakdown Resumes- Bears Aim for New 2018 Lows
- German DAX Signals Risk for Further Losses
- Written by Michael Boutros, Currency Strategist with DailyFX
To receive Michael’s analysis directly via email, please SIGN UP HERE
Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com
http://forms.aweber.com/form/63/1731135063.htm
