Never miss a story from Michael Boutros

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from Daily FX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage you subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Euro is down more than 1.2% off the weekly highs with the decline now looking to confirm resumption of the broader downtrend. Price is approaching key support into the yearly lows and the final hope for a near-term recovery in the single currency. These are the updated intraday targets & invalidations levels that matter for EUR/USD.

EUR/USD Daily Price Chart

EUR/USD Daily Price Chart

Technical Outlook: In this week’s Technical Perspective on the EUR/USD, we highlighted a rebound off weekly confluence support in the Euro with our focus on a larger recovery in price while above 1.16. The rally failed just above monthly open resistance early in the week with price breaking back below the figure today in U.S. trade.

A proposed pitchfork extending off the yearly lows highlights support at the November lows at 1.1554 with the 2016 high-close just lower at 1.1529- note that price has been unable to close below this range and a daily close here is needed to validate resumption of the broader downtrend targeting the 50% retracement at 1.1448. Daily resistance stands at 1.1727 with a breach above 1.1827 ultimately needed to shift the medium-term focus higher.

New to Forex Trading? Get started with this Free Beginners Guide

EUR/USD 120min Price Chart

EUR/USD 120min Price Chart

Notes: A closer look at Euro price action sees EUR/USD probing below the 61.8% retracement at 1.1589 with confluence support seen just lower at 1.1554/58- an objective break of the weekly opening-range low has us looking for a late-week low but IF price is going to recover, this is would be the spot to watch. Initial resistance stands back at 1.1640/45 backed by the monthly open at 1.1690 and the weekly range high / 61.8% retracement at 1.1721. A break below this formation targets 1.1529 backed by the 2016 high-day close at 1.1495 am 1.1448.

Why does the average trader lose? Avoid these Mistakes in your trading

Bottom line: Euro is heading back towards the yearly lows and we’ll need a daily close below this near-term support barrier to keep the immediate focus lower. IF this is just a final washout, look for exhaustion ahead of the monthly lows with a recovery back above the monthly open needed to get things going. From a trading standpoint, this could go both ways down here so watch price action heading into this near-term support zone.

If you’re already short, look to adjust exposure and bring in protective stops on a move into 1.1558/54. With the same respect, failure/exhaustion down there may offer favorable long-entries for a near-term recovery- we’ll re-asses at the close of the week. Join me on Friday for the return of my Foundations of Technical Analysis webinar series to review this setup and more!

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

EUR/USD IG Client Positioning

EUR/USD Trader Sentiment
  • A summary of IG Client Sentiment shows traders are net-long the Euro (EUR/USD)- the ratio stands at +1.26 (55.7% of traders are long) – bearishreading
  • Traders have remained net-long since June 14th; price has moved 1.8% lower since then
  • Long positions are 5.2% lower than yesterday and 8.8% lower from last week
  • Short positions are5.1% lower than yesterday and 8.6% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse higher despite the fact traders remain net-long.

See how shifts in EUR/USD retail positioning are impacting trend- Learn more about sentiment!

---

Relevant EUR/USD Data Releases

EUR/USD Economic Calendar

Economic Calendar - latest economic developments and upcoming event risk

Other Setups in Play

- Written by Michael Boutros, Currency Strategist with DailyFX

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