We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Trader tip: Not making a decision means avoiding #FOMOintrading. @IlyaSpivak https://t.co/PGD0n13D9p
  • Easing trade tensions provide tailwinds for equity markets. Get your update form @JMcQueenFX here: https://t.co/79q553DJNa
  • Here's a link to my technical outlook for the Dollar this week: 'US Dollar Facing Measured Breakout and In Its Long Grind Higher' https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/09/22/US-Dollar-Facing-Measured-Breakout-and-In-Its-Long-Grind-Higher.html?utm_source=Twitter&utm_medium=Kicklighter&utm_campaign=twr
  • RT @business: A senior official from the Bank for International Settlements has added his voice to those calling on governments to back up…
  • RT @JimPethokoukis: “The recent rise in trade policy uncertainty is extraordinary by several metrics ... much evidence points to negative e…
  • Traders should know how to confidently approach, enter and exit both Bull or Bear markets. Need some insight into it? Get it from @nickcawley1 here: https://t.co/GhvvFrB3gz https://t.co/JxyCkhOHSS
  • What is the biggest obstacle a trader needs to overcome to be successful? Find out from @JWagnerFXTrader here: https://t.co/7nWHSApUzS #FOMOintrading https://t.co/vXfEWo58RY
  • OECD warns of recession, central banks unleash, and the $USD builds breakout pressure. Get your update from @JohnKicklighter here: https://t.co/UKg6wfl8PB
  • What are the 6 common mistakes traders make? Is #FOMO a common mistake? Find out from @PaulRobinsonFX here:https://t.co/B7hOpGEHMp #FOMOintrading https://t.co/WOYk6lOJur
  • All currencies are not the same; emerging market #FX trades differently than developed market FX. Find out how these currencies differ, from @CVecchioFX here: https://t.co/BH8oal18sz https://t.co/IvomjZw0Bc
EUR/USD Weekly Technical Outlook: Euro Price Coiling Up, ECB Nearing

EUR/USD Weekly Technical Outlook: Euro Price Coiling Up, ECB Nearing

2018-04-21 10:49:00
Paul Robinson, Currency Strategist
Share:

EUR/USD Technical Highlights:

  • EUR/USD price action converging into a triangle
  • ECB on Thursday, but not expected to be a big market mover, never know, though
  • A breakout one way or another should be upon us relatively soon

For the intermediate-term fundamental and technical outlook for EUR/USD, check out the recently released DailyFX Quarterly Forecast.

The EUR/USD range is certainly testing traders’ patience, but those who remain disciplined and keep their powder dry are likely to be presented with a momentum-move relatively soon. Ranges don’t last forever. This is one of the tightest in the euro’s existence and getting tighter as price is wedging up into a triangle. A resolution is closing in.

This coming week we have the ECB on Thursday, but there isn’t any grand expectation for it to be a market-moving event. However, as per usual, expect the unexpected; you never know what the last grain of sand will be to collapse the pile (in this case, a breakout in either direction). Regardless of what the catalyst is – big, small, expected, unexpected, of the technical variety – when the range/wedge is finally broken a sizable move should begin.

On Friday, the euro thoroughly tested the bottom of the triangle, making a turnaround needed immediately this coming week to keep the pattern intact. Amid the testing of the bottom of the triangle was a slight breach of the April trend-line, but helping keeping the euro supported is a slope extending over from May of last year.

This makes the relative confluence of levels & lines important, as should they one-by-one begin breaking – 12215, 12155, then finally the 2017 high at 12092 – momentum should start to pick up. On the topside, the big threshold is the 2008 trend-line followed by the January high at 12556.

In either event, the move should be relatively large, with the size of the pattern pointing to about a 400-pip drive higher or lower upon a breakout. It’s always possible we see a fake-out breakout followed by a reversal in the opposite direction, but we’ll first run with what is presented to us and adjust accordingly, if need be.

For those looking for short-term ‘fade-trades’ off levels, a strategy we’ve been highlighting in recent weeks, the risk/reward profile is quickly diminishing with price action tightening up. At this juncture, waiting for a breakout appears to be the most prudent play.

Going through a slump right now? (It happens to the best.) Check out these 4 concepts for Building Confidence in Trading.

EUR/USD Daily Chart

EUR/USD daily chart with triangle

We will continue to monitor retail positioning via IGCS Client Sentiment should we see a breakout. A bullish breakout accompanied by a sharp rise in short positions will act as a contrarian bullish signal, while the opposite will hold true on a breakdown.

Helpful Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

To receive Paul’s analysis directly via email, please SIGN UP HERE

You can follow Paul on Twitter at @PaulRobinsonFX

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

DISCLOSURES

News & Analysis at your fingertips.