EUR/USD Weekly Technical Outlook: Euro Stalls at Wall of Resistance
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EUR/USD Technical Highlights:
- EUR/USD starts the week coming off resistance
- The turn lower keeps outlook mired in chop above 11500
- Clearance into the mid-11700s need to spark a rally
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EUR/USD starts the week coming off resistance
Last week, the euro found solid sponsorship once again near the 11500-mark, blowing life back into the possibility of seeing an extended rally off last month’s low. But to start the week, EUR/USD will have resistance to contend with via a group of trend-lines and peaks in the 11700/750-area.
Maintain below resistance and the outlook is for continued choppy trading as the euro stays right in the thick of congestion which has largely dominated traded since the end of May. A move towards 11500 could develop, but conviction on the downside doesn’t begin until that threshold is firmly broken. On the other hand, if the euro can break above the August 28 high it should be enough to spur further buying and push the euro up towards 11850 and possibly higher.
Tactically speaking, traders looking to fade resistance can use the 11700/50 area as a backstop for shorts, with the trend-line off the August low and 11500 as targeted support. Would-be longs will likely be best served waiting for a confirmed breakout, or nibbling near the 11500-level as a ‘last stance’ entry with stops just below.
If you have gotten a little off track we created a guide with 4 ideas to help rebuild your confidence.
EUR/USD Daily Chart
EUR/USD IG Client Sentiment
As per IGCS, positioning has been shifting around with the swings in the euro, but signaling remains indecisive with price bound by levels. For more details on the sentiment model and how it acts as a contrarian indicator, check out the IG Client Sentiment page.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
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