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EUR/USD Breaks Critical Resistance to New 2017 Highs

EUR/USD Breaks Critical Resistance to New 2017 Highs

Walker England, Forex Trading Instructor

Talking Points:

  • EUR/USD Breaks Critical Points of Resistance
  • 200 Day MVA is Now Acting Support at 1.0843
  • Looking for additional trade ideas for the Forex market? Read Our Market Forecast

The EUR/USD is breaking out through multiple points of resistance this morning, as the pair trades to new 2017 highs. The first point of resistance broken was the EUR/USD’s 200 day MVA found at 1.0843. This movement was quickly followed by a breakout in price above the December 2016 swing high at 1.0868. As prices rise, traders should consider that both of these points may now be references as values of support.

In the event that the EUR/USD reverses lower, traders should look for prices to trade back below both of these values before considering a turn in the Daily trend. Finally a shift in the markets short term trend may be identified beneath today’s 10 Day EMA. This value is found at 1.0808, and a price decline below this point would suggest that this morning’s breakout has been invalidated.

EUR/USD Daily Chart with Averages

Please add a description for the image.

(Created Using IG Charts)

Market sentiment for the EUR/USD now reads at fresh extremes, with SSI totaling -2.58. This is a significant shift from last week’s reading of -1.16. With 72% of traders short the market, this typically suggests that the EUR/USD may continue to trend higher. It should be noted that traders have remained net short the EUR/USD from March the 15th. From this point, prices have rose as much as 283 pips. If the market continues to trend higher, it would be expected to see sentiment remain near their current negative extremes. Alternatively in the event of a price reversal, sentiment figures would be expected to neutralize as the EUR/USD trades back from its new standing highs.

Want to learn more about trading with market sentiment? Get our Free guide here.

--- Written by Walker, Analyst for DailyFX.com

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

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