EUR/USD Technical Analysis: Euro at Key Range Floor. Now What?
EUR/USD TECHNICAL ANALYSIS: BEARISH
- Euro perched at key support defining 7-week digestion range
- Break lower may bring test below 1.07, resistance near 1.10
- Trader sentiment studies warn selling pressure may be ebbing
The Euro is idling near the bottom of a narrow range containing price moves against the US Dollar since early April. This barrier – situated in the 1.0768-78 area – is reinforced by a rising trend line limiting downside progress since the currency pair’s latest swing bottom was established in late March, at 1.0636.
A retest of this bottom may follow if EUR/USD can manage a break below immediate support, confirmed on a daily closing basis. Alternatively, a push above range resistance clustered around the 1.10 figure may set the stage to probe March 27 high at 1.1147 next.
EUR/USD TRADER SENTIMENT
Retail positioning data shows 54.99% of traders are net-long, with the long-to-short ratio at 1.22 to 1. IG Client Sentiment (IGCS) is typically used as a contrarian indicator, sothe net-long skew in traders’exposure suggests that the EUR/USD trend is biased downward.
However, the net-long tilt has narrowed compared with yesterday, with the number of traders on that side of the spectrum down 9.53 percent. While it is too early to extrapolate this to suggest a positioning shift is underway, it may imply ebbing near-term selling pressure.
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.