EUR/USD Weekly Technical Outlook: Euro Breakdown Set to Continue
EUR/USD Technical Highlights:
- Breach of support last week keeps focus lower
- Firm recapture of support needed to negate bearish bias
- Trend-line from Dec ’16 and August low could be targeted next week
For the intermediate-term fundamental and technical outlook, check out the DailyFX Q4 EURO Forecast.
The euro broke big support just above 11500 on Wednesday, then spent the remaining two days of the week testing the break. Friday, post NFPs, there was a second attempt into two days to recapture the broken threshold but to no avail.
This sets EUR/USD up for further losses in the week ahead. First up as support is last week’s low at 11463, but buyers are seen as putting up much of a fight there. That will likely be reserved for a more important line of support extending higher since December 2016.
The trend-line runs under the August low and is seen as the first level to potentially give pause to the slide that started last month. Watch price action should we see the trend-line tested next week. If buyers fail to show up in a strong fashion then a break could very well be in the cards, in which case the August low under 11300 will quickly come under fire.
To negate a bearish outlook a clear break and close back above resistance will be needed, with the euro closing somewhere in the upper 11500s. Until a close occurs firmly above, the outlook will remain bearish.
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EUR/USD Daily Chart
As per IGCS, traders are marginally long EUR/USD with 57% holding a bullish position. As a contrarian signal this is viewed as bearish. For more details on the sentiment model and how it acts as a contrarian indicator, check out the IG Client Sentimentpage.
EUR/USD IG Client Sentiment
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.