Talking Points:
- EUR/USD Opens Lower for 5th Session
- EMA Resistance Found at 1.0720
- Sentiment Remains Neutral: IG Client Sentiment Reading at +1.075
The EUR/USD has opened Monday’s trading lower, which opens the possibility of the pair declining for its 5th consecutive session. This short term downtrend was established last week as the EUR/USD was technically rejected last week against its 200 day MVA (simple moving averaged), and then quickly declining beneath its 10 day EMA (exponential moving average). These averages now stand respectfully at 1.0832 and 1.0720, and are working as points of resistance as prices decline.
In the event of a continued bearish move this week, traders should first look for the EUR/USD to challenge the March 14th low of 1.0600. This line is acting as a value of price action support, and a decline below 1.0600 exposes the standing monthly low found at 1.0494. If the EUR/USD rallies however, traders should first look for the pair to trade above the 10 day EMA at 1.072. This would suggest a shift in the pair’s short term trend, allowing traders to then target higher values of resistance.
EUR/USD Daily Chart with Averages
Sentiment analysis for the EUR/USD stands at a neutral reading, with IG Client Sentiment reading at +1.075. With 52% of traders positioned long and 48% short, this reading remains mixed. In the event that the EUR/USD declines further this week, traders may look for sentiment figures to shift towards new positive extremes of +2.0 or greater. Alternatively in the event that the EUR/USD rebounds, it would be expected to see sentiment values flip negative then move towards new extremes.
--- Written by Walker, Analyst for DailyFX.com
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