Euro Technical Price Outlook: EUR/USD Near-term Trade Levels
- Euro updated technical trade levels – Daily & Intraday Charts
- EUR/USD breakout testing yearly uptrend resistance- on the lookout for inflection
- Topside resistance 1.2336 & 1.2409 – constructive while above 1.2090
Euro surged to fresh yearly highs against the US Dollar post- FOMC with EUR/USD now testing yearly uptrend resistance- looking for infection up here. These are the updated targets and invalidation levels that matter on the EUR/USD technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Euro 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 into resistance at the September high-day close with a, “breach above 1.1911 needed to mark resumption of the broader uptrend.” Euro held this threshold for more than two weeks before breaching into the close of November with the rally now extending into yearly uptrend resistance.
Look for inflection at the upper parallel of the pitchfork formation extending off the yearly lows (blue) with a breach / close above needed to keep the long-bias viable towards channel resistance / the 88.6% Fibonacci retracement at 1.2336- look for a lager reaction there IF reached. Daily support rests with the weekly open / 78.6% retracement at 1.2135/45 with bullish invalidation now raised to 1.2011.
Euro Price Chart – EUR/USD 240min
Notes: A closer look at Euro price action shows EUR/USD trading into the upper parallel today in early New York trade with the rally attempting to mark a fourth consecutive daily advance. Look for inflection here with a breach higher exposing confluence resistance at 1.2336- a close above this threshold could fuel accelerated gains for the Euro with subsequent topside objectives eyed at the 2018 high-day/week close at 1.2409and the 2018 high at 1.2555. Look for downside exhaustion ahead of channel support / the 2017 high at 1.2092 IF price is indeed heading higher on this stretch.
Bottom line: Euro has rallied more than 5.5% off the November lows and while the breakout keeps the broader focus higher, the rally may be vulnerable in the days ahead as price approaches uptrend resistance. From at trading standpoint, a good region to reduce long-exposure / raise protective stops- on the lookout for inflection off the upper parallel here with a breach keeping the focus on a more significant reaction into confluence resistance near 1.2336. Ultimately a close below the 1.2011 would be needed to suggest a more significant near-term high is in place. 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 -2.18 (31.42% of traders are long) – typically bullish reading
- Long positions are 0.28% lower than yesterday and 4.86% lower from last week
- Short positions are1.30% lower than yesterday and 4.59% 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. Traders are less net-short than yesterday but more net-short from last week. The combination of current positioning and recent changes gives us a further mixed EUR/USD trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 0% | -10% | -3% |
| Weekly | -5% | 14% | 1% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
