Euro Weekly Price Outlook: EUR/USD Breakout Underway– Levels to Know

2019-06-08 04:00:00

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EUR/USD Weekly Price Chart
EUR/USD Trader Sentiment
Key Euro / US Data Releases

Weekly technicals on USD/CHF- Price breakdown targeting confluence support at yearly open
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In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro rallied more-than 1.5% against the US Dollar this week after breaching above a multi-month resistance slope. The advance takes price within striking distance of a key Fibonacci consideration with the yearly open just higher. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

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EUR/USD Weekly Price Chart

Notes:In last month’s Euro Weekly Price Outlook we noted that EUR/USD had, “responded to multi-year slope support and we’re looking for signs of basing in price action with a close above channel resistance needed to clear the way.” Price broke through channel resistance this week a +1.5% advance taking Euro back above the August lows at the 1.13-handle.

The breakout keeps EUR/USD constructive while above confluence support at 1.1187. Subsequent topside resistance objectives at the 61.8% retracement of the 2019 range at 1.1393 and the objective yearly open at 1.1445 – look for a more significant reaction there IF reached. A break / close below 1.1107 would be needed to mark resumption of the broader downtrend.

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Bottom line: Euro held long-term slope support for over two months with the breach above channel resistance this week shifting the focus back to the long-side as we head deeper into June trade. From a trading standpoint, look to reduce long-exposure / raise protective stops on a test of the upper targets here. Ultimately, we’ll favor fading weakness while above 1.1187.Review my latest EUR/USD Price Outlook for a closer look at the near-term trading levels.

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EUR/USD Trader Sentiment

A summary of IG Client Sentiment shows traders are net-short EUR/USD - the ratio stands at -1.39 (41.9% of traders are long) – weak bullish reading
Long positions are 11.6% lower than yesterday and 37.3% lower from last week
Short positions are 14.9% higher than yesterday and 60.7% higher from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Traders are further net-short than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger EUR/USD-bullish contrarian trading bias from a sentiment standpoint.

See how shifts in EUR/USD retail positioning are impacting trend- Learn more about sentiment!

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