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EUR/USD Continues to Press Higher, Eyes 1.2556 Multi-Year High

EUR/USD Continues to Press Higher, Eyes 1.2556 Multi-Year High

Nick Cawley, Strategist

EUR/USD Price, News and Analysis:

  • The mid-February 2018 swing high is the next level of resistance for EUR/USD.
  • US data and releases this week may make-or-break the US dollar.
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The ongoing weakness of the US dollar, coupled with a modicum of Euro strength is lifting EUR/USD ever higher and back towards highs seen nearly three years ago. The greenback sold off sharply yesterday to open the year and if the US dollar index (DXY) remains below 90.00 for any length of time – currently 89.58 – then further losses look likely going forward. Today’s Georgia run-off election is the first in a series of US dollar pressure points this week, followed by US ISM later today, the latest FOMC minutes tomorrow and US nonfarm payrolls on Friday.

For all market-moving economic data and events, see the DailyFX Calendar.

The daily EUR/USD chart shows the pair re-testing the recent 32-month high – 1.2312 – with little in the way of resistance after this level before the mid-February 2018 swing-high at 1.2556. The pair remain supported by all three simple moving averages with the 20-day sma around 1.2214 the first level of support.

EUR/USD Daily Price Chart (March 2020 – January 5, 2021)

EUR/USD Continues to Press Higher, Eyes 1.2556 Multi-Year High

IG Retail trader datashow38.03% of traders are net-long with the ratio of traders short to long at 1.63 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise.Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse lower despite the fact traders remain net-short.

What is your view on EUR/USD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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

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