Euro Technical Price Outlook: EUR/USD Near-term Trade Levels
- Euro updated technical trade levels – Daily & Intraday Charts
- EUR/USD testing multi-year Fibonacci resistance- bulls at risk into 1.1600/21
- Trade remains constructive while above 1.1437- topside breach exposes 1.1712
Euro is poised to mark a fifth consecutive weekly advance with EUR/USD up more than 1.4% since the Sunday open. The rally takes price into a multi-year Fibonacci resistance and while the broader outlook remains constructive, the immediate advance may be vulnerable near-term. These are the updated targets and invalidation levels that matter on the EUR/USD price charts heading into the close of the week. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Euro trade setup and more.
Euro Price Chart – EUR/USD Daily
Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview
Technical Outlook: In our last Euro Technical Price Outlook we noted that EUR/USD was trading, “just above a key support pivot we’ve been tracking and the focus is on a reaction off this threshold.” The region was defined by the Fibonacci support confluence at 1.1167/87- price registered a low at 1.1185 into the start of July before ripping higher with the advance now testing subsequent resistance at the 50% retracement of the 2018 decline / October 2018 high at 1.1595-1.1621.
A breach / close above this threshold is needed to mark resumption towards subsequent resistance objective at 1.1712 and 1.1815/22. Initial daily support now 1.15 with bullish invalidation now raised to the March high-day close / 2019 open at 1.1437/45. A close below this threshold would be needed to suggest a larger reversal is underway.
Euro Price Chart – EUR/USD 120min
Notes: A closer look at Euro price action sees EUR/USD trading within an ascending pitchfork formation with the recent rally stalling here at the 75% parallel / key resistance. Initial support along the median-line backed by 1.15 and 1.1437/45 – both levels of interest for possible downside exhaustion IF reached.
Bottom line: Euro is testing multi-year Fibonacci resistance here at the 1.16-handle and the immediate advance may be vulnerable while below this threshold- watch the close. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops – be on the lookout for an exhaustion low while within this formation with a close above 1.1621 needed to mark resumption of the broader uptrend. Review my latest Euro Weekly Price Outlook for an in-depth look at the longer-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
- A summary of IG Client Sentiment shows traders are net-short EUR/USD - the ratio stands at -2.11 (32.11% of traders are long) – bullish reading
- Long positions are 12.80% higher than yesterday and 22.37% higher from last week
- Short positions are1.21% lower than yesterday and 3.52% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. From a sentiment standpoint, the recent changes in positioning warn that the current EUR/USD price trend may soon reverse lower despite the fact traders remain net-short.
| Change in | Longs | Shorts | OI |
| Daily | 14% | 3% | 10% |
| Weekly | 14% | -17% | 0% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
