EUR/USD Technical Analysis: Euro Rejected at 2020 Trend Top
EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro rejected at confluence of resistance marked by 2020 trend line
- Support zone under 1.10 back in play, break may expose October low
- Sentiment studies broadly bearish but near-term guidance mixed
The Euro recoiled from resistance guiding it lower against the US Dollar since the beginning of the year. The barrier found added reinforcement at the underside of former support establishing the floor of the single currency’s recovery in the fourth quarter of 2019.
Prices have now returned to challenge the 1.0968-90 area, which has capped the downside for almost four months. Breaking below that with confirmation on a daily closing basis seems likely to open the door for a subsequent test of the October 1 swing bottom at 1.0879.
Reclaiming a foothold above 1.1149 – again, with daily-close confirmation – is probably a prerequisite for neutralizing near-term selling pressure. That would shift gears to “neutral”, with a subsequent push above the December high at 1.1239 needed to set the stage for a more overtly constructive view.
EUR/USD TRADER SENTIMENT
Retail trader data shows 69.14% of traders are net-long with the ratio of traders long to short at 2.24 to 1. The number of traders net-long is 22.96% higher than yesterday and 6.04% lower from last week, while the number of traders net-short is 23.44% lower than yesterday and 1.28% higher from last week.
IG Client Sentiment(IGCS) is typically used as a contrarian indicator, and the fact traders are net-long suggests EUR/USD may continue to fall. However, positioning is more net-long than yesterday but less net-long from last week. That makes for asomewhat mixed bias in the immediate term.
EUR/USD TRADING RESOURCES
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.