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US Dollar Breakdown Pushes EUR/USD to Fresh Yearly Highs

US Dollar Breakdown Pushes EUR/USD to Fresh Yearly Highs

Justin McQueen, Strategist

EUR/USD Price Analysis & News

  • EUR/USD Hitting Fresh Yearly Highs as US Dollar Slide Continues
  • IG Client Sentiment Signals Further Rise in EUR/USD
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EUR/USD Hitting Fresh Yearly Highs as US Dollar Slide Continues

The slide in the US Dollar persists with sentiment remaining soft, which in turn has seen its major counterparts continue to track higher levels. The Euro hovers at multi-year highs, however, the currency stop short of breaking above the 1.23 handle having hit an intra-day high of 1.2294. As the path of least resistance for equity markets remains higher, upside in the USD will be hard to come by. Alongside this, with the consensus for the USD to remain on the backfoot in 2021, the Euro could extend towards the 2017 peak of 1.25.

Pivot | 1.2242

Support | 1.2211, 1.2174, 1.2143

Resistance | 1.2279, 1.2310, 1.2342

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EUR/USD Chart: Weekly Time Frame

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Source: Refinitiv

G10 FX Intra-day Performance

IG Client Sentiment Signals Further Rise in EUR/USD

IG client sentiment data shows 30.19% of traders are net-long with the ratio of traders short to long at 2.31 to 1. The number of traders net-long is 11.39% lower than yesterday and 17.44% lower from last week, while the number of traders net-short is 7.37% higher than yesterday and 12.17% 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 and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/USD-bullish contrarian trading bias.

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

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