EUR/USD Weekly Technical Outlook: Can the Euro Continue Friday's Reversal?
EUR/USD Technical Highlights:
- Euro sell-off brought August lows into focus
- Levels on top-side to watch arrive in 11430/50 area
- Additional support below at underside 1-yr trend-line
For the intermediate-term fundamental and technical view, check out the DailyFX Q4 Euro Forecast.
Last week we saw the euro have a fairly rough week as the macro landscape continues to heat up with the Dollar rallying and stocks getting hammered. Selling pushed EUR/USD below recent support around 11500 and the trend-line from December 2016.
This brought into play the August low where the euro just ahead of the critical 11301 level found buyers. As we head through the next week, we’ll learn more about how much more sponsorship wants to show up. It was a fairly strong turnaround, one worth taking note of if short. From the long-side, no interest on this end at this time in trying to find a low.
On the top-side the underside of the December 2016 trend-line is up first as resistance, followed by 11430/50, which is made up of recent lows and a trend-line on the 4-hr running off the 10/16 high. In-line with the broader, a turn in momentum at resistance could offer another attractive spot for would-be shorts.
In the event 11301 eventually breaks, a trend-line extends beneath the August low from last November, this arrives in the low-11200s, and while not viewed as a substantial form of support it does present risk of putting in some kind of floor.
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EUR/USD Daily Chart (Found buyers near August low)
EUR/USD 4-hr Chart (Resistance ahead)
EUR/USD IG Client Sentiment
As per IGCS, retail traders were buying into weakness at one of the stronger paces in quite a while, giving a bearish contrarian signal. But with the reversal in price action this trend may move in reverse if the turnaround is for real. For more details on the sentiment model and how it can act as a contrarian indicator, check out the IG Client Sentimentpage.
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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.