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Euro Price Outlook: EUR/USD Plunges into Key Support– Trade Levels

Euro Price Outlook: EUR/USD Plunges into Key Support– Trade Levels

2020-02-21 16:30:00
Michael Boutros, Strategist
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Euro Technical Price Outlook: EUR/USD Weekly Trade Levels

  • Euro updated technical trade levels – Weekly Charts
  • EUR/USD plummets into critical technical support slope
  • Immediate short bias vulnerable into 1.0725/77

Euro has been in free-fall against the US Dollar with EUR/USD plummeting nearly 4% since the start of the year. The sell-off takes price into a multi-year pivot zones and while the broader focus remains weighted to the downside, the immediate decline may be vulnerable while above this key technical threshold. 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.

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Euro Price Chart – EUR/USD Weekly

Euro Price Chart - EUR/USD Weekly - Euro vs US Dollar Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview

Notes: In my last Euro Weekly Price Outlook we noted that EUR/USD had, “responded to key weekly resistance and the focus is on this pullback early in the month.” Price defended key resistance at 1.1187-1.1209early in the year before turning sharply lower with the breakdown taking Euro to fresh multi-year lows this week.

Critical weekly support is seen just lower at 1.0725/77 – note that a multi-year trendline of the dominant 2008 slope converges on this zone over the next few weeks and highlights the technical significance or this region. We’re looking for a reaction / pivot here- a break lower would expose the April 2017 swing lows near 1.0570s. Initial weekly resistance eyed at the September swing low at 1.0879 backed by the 2019 low-week close at 1.0976- a breach / close above this threshold would be needed to shift the focus back to the long-side.

{{GUIDE|EUR |Download Our Latest Quarterly Euro Price Forecasts!}}

Bottom line: The Euro breakdown is testing a critical long-term support zone here and leaves the immediate short-bias vulnerable while above 1.0725. From a trading standpoint, a good region to reduce short-exposure / lower protective stops. Be on the lookout for possible downside exhaustion while above this region- rallies should be limited to 1.0976 IF Euro is indeed heading lower. 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

Euro Trader Sentiment - EUR/USD Price Chart - Euro vs US Dollar Trade Outlook- Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +3.13 (75.80% of traders are long) – bearish reading
  • Long positions are3.86% higher than yesterday and 7.59% higher from last week
  • Short positions are 12.28% lower than yesterday and 3.45% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD 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.
EUR/USD BULLISH
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of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -20% 9% -2%
Weekly -20% 15% 2%
Learn how shifts in Euro retail positioning impact trend
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Key Euro / US Data Releases

Euro / US Economic Calendar - EUR/USD Key Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Previous Weekly Technical Charts

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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