Euro Price Outlook: EUR/USD Soars Through Resistance- Breakout Targets

2019-10-17 20:30:00

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Euro Price Chart – EUR/USD Weekly
Euro Trader Sentiment – EUR/USD Price Chart
Latest Weekly Technical Charts

EUR/USD rally breaking downtrend resistance- constructive while above 1.0976
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Euro is on track to post the third weekly advance with against the US Dollar with the EUR/USD surging more than 0.8% since the start of the week. The rally takes price through multi-month trend resistance and leaves the door open for further advances in the weeks ahead. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Loonie price setup and more.

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Euro Price Chart – EUR/USD Weekly

Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview

Notes: In my previous EUR/USD Price Outlook we noted that Euro was, “contracting just above major downslope support and leaves the broader short-bias vulnerable into these lows… we’re on the lookout for a near-term exhaustion low to give way to larger recovery while above 1.0814.” Price has now rallied more than 2.2% off the early October (yearly) low with a break above the June trendline accelerating the advance this week.

The immediate focus is on the weekly close in relation to the May lows at 1.1107- failure to close above would leave the advance vulnerable into next week. Weekly support and medium-term bullish invalidation rests with the yearly low-week close at 1.0977. Weakness beyond this region would expose the 2016 November outside-weekly-reversal close at 1.0854.

The next critical resistance confluence is eyed at 1.1186-1.1208 – a region defined by the 61.8% retracement of the 2017 advance and the June decline. A breach / close above this threshold is needed to fuel the next leg higher in price targeting yearly slope resistance, currently around ~1.13.

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Bottom line:Euro has broken out and the rally remains viable while above former slope resistance. From at trading standpoint, look to reduce long-exposure / raise protective stop on a stretch towards 1.1187-1.1208 – look for a bigger reaction there IFreached. We’ll favor fading weakness while above 1.0976 for now. I’ll publish an updated Euro Price Outlook once we get further clarity on EUR/USD technical trading levels.

Euro Trader Sentiment – EUR/USD Price Chart

A summary of IG Client Sentiment shows traders are net-short EUR/USD - the ratio stands at -1.25 (44.4% of traders are long) – weak bullish reading
Long positions are17.56% lower than yesterday and 16.90% lower from last week
Short positions are 2.64% higher than yesterday and 11.26% lower 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 and last week, and the combination of current sentiment 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!

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