EUR/USD Technical Highlights:
- Euro found opposition again last week, which…
- Has 11300 level back in focus again
- Breaching support could spur strong selling, but…
- Support is to be respected until broken
For the intermediate-term fundamental and technical view, check out the DailyFX Q4 Euro Forecast.
EUR/USD11300 level very important
Last week, the Euro tried to rally but was swatted back lower in-line with the general trend. This could very soon have more pressure again on 11300, an increasingly important level. It all began back in November 2016 when the surprise outcome of the U.S. election caused a major spike and reverse in the Dollar.
The high on that nearly 400-pip range day in the Euro was 11299. Early in 2017 the spike-high was an obstacle during the Euro’s run to the 2018 peak, then in August we saw a turn at 11301 which resulted in a rather sizable rally, and most recently, on 10/31, EUR/USD traded down to 11302 before bouncing back to 11500. All of this has the area immediately surrounding 11300 meaning quite a bit right now.
With the overall trend lower pressure is increasing on support, and if should it give-way then we may see a sharp decline similarly to the one in August when 11500 broke. There is a 1-year underside trend-line down near 11200 to be mindful of on a break, but if indeed we see a rush of sellers that line of support might not be enough to stem selling. A swing-low from last year near 11100 might be more in order on a breakdown.
However, before getting too geared up from the short-side support is support until broken, and with that said it wouldn’t be entirely unsurprising to see yet another bounce develop soon. Tactically speaking, though, longs don’t hold much appeal from where I sit.
Traders are generally bullish EUR/USD, see how this acts as a contrarian indicator on the IG Client Sentiment page.
EUR/USD Daily Chart (11300 support very important)
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX