We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bullish
More View more
Real Time News
  • As the global economy continues to contract, the risk of geopolitical threats undermining financial and economic stability are rising, leaving the door open to violent volatility. Get your market update from @ZabelinDimitri here:https://t.co/2HEzqPobvA https://t.co/k13SwJmbRm
  • RT @IGSquawk: We're currently pricing #GBPUSD at 1.2852 and #FTSE at 7129.2 That's a drop of 1.18% from Fridays close for GBPUSD and 0.22%…
  • #DidYouKnow a #Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/c51s3IBcEu https://t.co/K6W9X4v8XD
  • The $NZD may be carving out a near-term bottom against its US counterpart but scope for gains seems limited within a broader downtrend. Get your technical analysis from @IlyaSpivak here: https://t.co/7bsVuSyWMn https://t.co/DsmNYKk8v3
  • Can you trade with the joy of missing out (#JOMO)? Find out how you can turn your #FOMOintrading to JOMO here: https://t.co/G5H26NXZQe https://t.co/pVdKUPzvmk
  • RT @PaulBrandITV: It’s likely that this will end up in court on Monday. The case in the Scottish courts may well consider that this doesn’t…
  • RT @PaulBrandITV: BREAKING: Tonight the PM has sent this letter to EU requesting an extension to Brexit. Wording is copied and pasted from…
  • RT @FactSet: $SPX is reporting a (Y/Y) decline in earnings of -4.7% for Q3 2019, which would mark the 3rd straight quarter of (Y/Y) earning…
  • RT @MehreenKhn: 🔔🔔 Here is the letter Boris Johnson has sent to Brussels tonight saying an extension would "damage" interests of the EU and…
  • What is #forex time frames and how can it be applied to multi-time frame analysis. Find out here: https://t.co/uEmAGW4ckP https://t.co/f4RrjSQK8y
EUR/USD Price Outlook: Euro Consolidation Looks to FOMC For Fuel

EUR/USD Price Outlook: Euro Consolidation Looks to FOMC For Fuel

2018-12-18 19:00:00
Michael Boutros, Technical Strategist
Share:

Despite the recent surge in volatility, Euro is virtually unchanged for the month of December with price continuing to trade within the confines of a multi-month consolidation range. These are the updated targets and invalidation levels that matter on the EUR/USD chartsheading into FOMC interest rate decision. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

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

EUR/USD Daily Price Chart

EUR/USD Daily Price Chart

Technical Outlook: In my latest EUR/USD Price Outlook our ‘bottom line’ noted that the price had responded to, “multi-month consolidation support and IF euro is heading higher, price would need to stabilize here above the 1.13-handle. From a trading standpoint, I’ll favor fading weakness while above this threshold but ultimately a breach above 1.1443 is needed to suggest a larger advance is underway.

Euro briefly registered a low at 1.1270 before rebounding sharply with price continuing to respect the October consolidation range ahead of tomorrow’s FOMC interest rate decision. Daily resistance stands at the 61.8% extension of the November advance at the 1.1426 confluence zone with a breach/close above the December opening-range high needed to suggest a more significant low is in place.

Learn how to Trade with Confidence in our Free Trading Guide

EUR/USD 240min Price Chart

EURUSD 240min Price Chart

Notes: A closer look at price action shows Euro trading within the confines of an ascending pitchfork formation extending of the yearly lows but it’s still too soon to rely on heavily. Look for initial support ahead of 1.1337 with the recovery still viable wile above weekly open support at 1.13. Initial resistance at 1.1404 backed by the monthly high at 1.1443 – a close above this level would expose subsequent objectives at 1.1472, the 100-day moving average at ~1.1490 and the 1.1515/24 confluence resistance zone.

A break below 1.1270 would invalidate the reversal play with such a scenario targeting the yearly low at 1.1215 backed by more significant support at the 61.8% retracement of the 2017 advance at 1.1186. It’s make-or-break for Euro heading into the close of the year.

Even the most seasoned traders need a reminder every now and then- Avoid these Mistakes in your trading

Bottom line: We’ve slightly adjusted the consolidation parameters to account for recent price action but ultimately, we’re looking for a break of the 1.1270-1.1426 range for guidance with the broader decline vulnerable while above 1.13 near-term. From a trading standpoint, I’d be looking for a downside exhaustion near the lower parallel on a downside spike tomorrow. IF price fails ahead of the range highs, look for a break sub-1.1270 to fuel an accelerated drop in price.

As always, use caution heading into the FOMC tomorrow- Keep in mind that while the markets are broadly expecting a 25bps hike, the focus will be on the accompanying statement and updated economic projections. Tread lightly.

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

EUR/USD Trader Sentiment

Please add a description for the image.
  • A summary of IG Client Sentiment shows traders are net-short EUR/USD - the ratio stands at -----1.16 (46.2% of traders are long) – neutralreading
  • Long positions are16.3% lower than yesterday and 11.5% lower from last week
  • Short positions are 11.8% higher than yesterday and 18.9% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Traders are further net-short than yesterday & last week and the combination of current positioning and recent changes gives us a stronger EUR/USD-bullish contrarian trading bias from a sentiment standpoint.

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. Learn more about how we Trade the News in our Free Guide!

Active Trade Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.