Euro Price Chart: EUR/USD Holding Multi-year Trend Support
- EUR/USD testing critical multi-year slope support – bears vulnerable above 1.1186
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Euro is down more than 0.4% this week with price now testing multi-year slope support late in the month. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this gold price setup and more.
Euro Price Chart – EUR/USD Weekly
Notes:In my last EUR/USD Price Outlook we highlighted that the Euro rally was, “testing initial resistance targets here around 1.14 and while the broader focus remains higher, the advance is vulnerable near-term heading into the yearly open- Watch the weekly / monthly close. Price closed that week at 1.1368 before turning lower with EUR/USD testing a key slope support for the past three weeks.
Note that Euro has been unable to mark a weekly close below the lower parallel of the broad ascending pitchfork formation we’ve been tracking off the 2015 / 2017 lows – the focus is on a reaction off this threshold with the bears at risk while above the 61.8% retracement at 1.1186. A break / weekly close below would be needed to keep the short-bias viable targeting 1.1107 and former channel resistance, currently around ~1.1050. Resistance steady at 1.1393 with a breach above the yearly open at 1.1445 needed to suggest a larger advance is underway targeting 1.16.
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Bottom line:Euro has been testing this slope support since mid-April and leaves the immediate short-bias vulnerable. From a trading standpoint, a good place to reduce short-exposure / lower protective stops – watch the weekly closes for guidance. Look for downside exhaustion ahead of 1.1186 IF prices are going to hold this slope with a breach above 1.1445 needed to shift the broader focus higher. I’ll publish an updated Euro Price Outlook once we get further clarity in near-term EUR/USD price action.
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Euro Trader Sentiment (EUR/USD)
- A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +2.03 (67.0% of traders are long) – bearish reading
- Traders have remained net-long since July 1st; price has moved 0.7% lower since then
- Long positions are 3.5% lower than yesterday and 2.0% lower from last week
- Short positions are 13.9% lower than yesterday and 16.0% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Euro prices may continue to fall. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger EUR/USD-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in Euro retail positioning are impacting trend- Learn more about sentiment!
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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
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