Euro Outlook: EUR/USD Coronavirus Breakout Surges to Fresh 2020 High
Euro Technical Price Outlook: EUR/USD Weekly Trade Levels
- Euro updated technical trade levels & sentiment – Weekly Chart
- EUR/USD breaches multi-month downtrend resistance- constructive while above 1.1170
- Immediate advance vulnerable into 1.1445/57
Euro surged higher against the US Dollar for a second consecutive week with EUR/USD soaring 2.4% to trade at 1.1294 ahead of the New York close on Friday. A breakout above multi-month-downtrend resistance saw the rally stretch as high as 5.35% off the February lows before pulling back. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Euro trade setup and more.
Euro Price Chart – EUR/USD Weekly
Notes:In my last Euro Weekly Price Outlook we noted that the EUR/USD, “breakdown is testing a critical long-term support zone here and leaves the immediate short-bias vulnerable while above 1.0725/77.” Price registered a low at 1.0777 before reversing sharply with a three-week rally taking Euro to fresh 2020 highs on Friday.
Initial resistance is eyed at the June high-day close at 1.1367 with critical confluence resistance eyed at 1.1445/71- a region defined by the objective 2019 yearly open and the 38.2% retracement of the 2018 decline. Look for a bigger reaction there IF reached with a close above needed to suggest a more significant low was registered last month. Yearly open support at 1.1222 backed by the Fibonacci confluence at 1.1170/86- losses should limited to this threshold IF price is indeed heading higher.
Bottom line: The Euro breakout is approaching initial resistance objectives just higher and keeps the broader focus higher while above 1.1170. Form a trading standpoint, look to reduce long-exposure / raise protective stops on a test higher. Ultimately, we’ll be on the lookout for downside exhaustion on pullback to offer more favorable entries closer to uptrend support. I’ll publish an updated Euro Price Outlook once we get further clarity on the near-term EUR/USD technical trade levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Euro Trader Sentiment – EUR/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-short EUR/USD - the ratio stands at -2.06 (32.64% of traders are long) – bullish reading
- Long positions are8.93% lower than yesterday and 29.42% lower from last week
- Short positions are 15.02% lower than yesterday and 27.85% 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. Yet, traders are less net-short than yesterday but more net-short from last week and the combination of current positioning and recent changes gives us a further mixed EUR/USD trading bias from a sentiment standpoint.
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Previous Weekly Technical Charts
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- Canadian Dollar (USD/CAD)
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--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.