EURUSD Technical Forecast: Trend & Resistance Give Euro Weak Backdrop Heading into Next Week
EURUSD Technical Highlights:
- Trend and resistance provide backdrop for selling to come
- Low volatility environment unsupportive of follow-through
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Trend and resistance provide backdrop for selling to come
Last week brought with it strength as the pattern of reversing momentum remains a theme during this low-volatility environment. Look for more of the same in the foreseeable future as market participants try to figure out the macros on the Euro and Dollar.
With trend-lines starting in the current vicinity up to around 11380, EURUSD is reaching a point in time where if it is to turn lower it will do so very soon. A solid turnabout day or two will help with timing, similar to how things played out the past few times we saw bounces turn into selling in January and February.
If a strong downturn develops, the high of the move can be used as a backstop for shorts. Targets on the downside are conservative, with the area just below 11200 arriving first as support, followed by the low-11100s where several lines intersect to create solid confluence of support.
Tactically, it makes sense to continue booking most of one’s profits after conservative targets are met, with maybe a small piece of the position held in the event momentum develops during one of these price swings. Volatility will eventually pick up, but until then we must remain focused on executing trades as they fit in the current environment…
Traders are flat EURUSD, see the IG Client Sentiment page to find out how changes in positioning can act as a signal for price direction.
EURUSD Daily Chart (trend & resistance unfavorable)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX
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