EUR/USD Technical Analysis: Euro Perched at Key Trend Barrier
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EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro testing key support after upswing is rejected near 1.10 figure
- Break of support under 1.08 would probably expose March bottom
- Trader sentiment studies warn a bullish disposition may be firming
The Euro was knocked back lower after a test of resistance near the 1.10 figure, with prices now testing rising trend support limiting the downside for nearly a month. Making the case for lasting weakness probably calls for a move through that to close under the lower bound of the 1.0783-1.0880 zone.
The swing low at 1.0636 might be back in play in that scenario. Alternatively, a rebound that allows EUR/USD to establish a foothold above the 1.0992-1.1009 region could pave the way for another challenge of the March 27 high at 1.1147.
The four-hour chart offers a sense of more immediate price levels of significance. A preliminary break of rising trend support seems to have played out already but the 1.0848-54 zone is holding back further weakness for now. The 1.0901-25 congestion band marks immediate resistance.
EUR/USD 4-hour chart created with TradingView
EUR/USD TRADER SENTIMENT
Retail positioning data shows 55.65% of traders are net-short, with the long-to-short ratio at 1.25 to 1. IG Client Sentiment(IGCS) is typically used as a contrarian indicator, sothe net-short skew in traders’exposure suggests that EUR/USD is biased upward.
In fact, the net-short tilt appears to be growing. Just over 10 percent more traders are betting on Euro weakness today than yesterday. Their ranks are up 33.16 percent relative to a week ago. That seemingly makes for a strengthening sentiment-based bullish trading bias.
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.