- Updated weekly technicals on EUR/USD head of ECB– price in consolidation above key support
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In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro has continued to hold above a key support barrier we’ve been tracking for the past few months and we’re looking for a reaction heading into the ECB interest rate decision this week. Here are the key targets & invalidation levels that matter on the EUR/USD weekly chart heading into the close of the year. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.
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EUR/USD Weekly Price Chart
Notes: In my previous EUR/USD Weekly Technical Outlook we noted that, “Euro has responded to long-term support and keeps the focus weighted to the topside while above 1.13,” – a level defined by the November 2016 high and the 200-week moving average. Price has continued to respect this threshold and on weekly close basis and we’re looking for the break of this multi-week consolidation structure for guidance.
Initial weekly resistance stands with the September high-week reversal close at 1.1603 backed by the 38.2% retracement of the yearly range at 1.1728. A break below 1.13 would keep the focus on the 61.8% retracement of the 2017 advance at 1.1186 – look for a bigger reaction there IF reached.
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Bottom line: The monthly opening range has taken shape just above confluence support and we’re look for the break for guidance. From a trading standpoint, the broader short-bias remains at risk while above this level and for now, I’ll be on the lookout for possible price exhaustion on a move towards 1.13 again. I’ll publish an updated EUR/USD scalp report once we get further clarity on near-term price action.
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EUR/USD Trader Sentiment
- A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +1.1 (52.4% of traders are long) – neutral reading.
- Traders have remained net-long since November 23rd; price has moved 0.2% higher since then
- Long positions are 3.7% lower than yesterday and 17.2% lower from last week
- Short positions are 8.0% higher than yesterday and 9.7% higher 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
Previous Weekly Technical Charts
- Australian Dollar (AUD/USD)
- Canadian Dollar (USD/CAD)
- Gold (XAU/USD)
- Crude Oil (WTI)
- Euro vs Japanese Yen (EUR/JPY)
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at email@example.com