Euro Technical Outlook: EUR/USD and EUR/GBP Prices and Forecasts
Euro Price, News and Analysis:
EUR/USD is currently struggling to hold onto the 1.21 handle after having fallen from just 1.2250 yesterday, as US Treasury yields jumped, underpinning the greenback. The EUR/USD sell-off over the last 24 hours has broken the recent uptrend, which looked primed for a run at the early January high print at 1.2349, and the short-term outlook for the pair is now neutral. The 20-day simple moving average is located at 1.2100 and a break below here opens the way to a prior support level around 1.2054, an area that is likely to hold in the short-term. EUR/USD looks set to continue trading within a 1.2050/1.2350 range for the time being.
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EUR/USD Daily Price Chart (June 2020 – February 26, 2021)
IG Retail trader datashow 41.27% of traders are net-long with the ratio of traders short to long at 1.42 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise.Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/USD trading bias.
EUR/GBP is being moved by a different force with the British Pound continuing its strong run of late, despite yesterday’s pop lower. The pair dropped sharply mid-week in Asian times before recovering and bounced higher late yesterday as the Euro benefitted from a haven bid. As we go into the weekend EUR/GBP is back below 0.8700 and the path of least resistance remains to the downside, although this week’s moves have started to bring short-term price action into question. The medium-term outlook for the pair remains lower but in the short-term EUR/GBP may drift back up to the 0.8740-0.8750 level before resuming the downtrend. Keep an eye on EU and UK vaccination data as this continues to be one of the main drivers of the pair.
EUR/GBP Daily Price Chart (June 2020 – February 26, 2021)
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