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Euro Outlook: EUR/USD Plummets Towards 1.17- Bear March into April

Euro Outlook: EUR/USD Plummets Towards 1.17- Bear March into April

Michael Boutros, Strategist

Euro Technical Price Outlook: EUR/USD Near-term Trade Levels

  • Euro updated technical trade levels – Daily & Intraday Charts
  • EUR/USD plunges nearly 3% off March high– bears vulnerable into support / monthly close
  • Support objectives eyed at 1.1695 & 1.1.1622 – risk for further losses sub-1.1845
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Euro is poised to mark a third consecutive weekly decline against the US Dollar with EUR/USD plunging nearly 3% from the monthly high. The declines takes Euro more than 5% off the yearly / January high with EUR/USD now approaching the first major technical support hurdle just lower. These are the updated targets and invalidation levels that matter on the EUR/USD technical price charts heading into the March close / April open with US Non-Farm Payrolls on tap this Friday. Review my latest Strategy Webinar for an in-depth breakdown of this Euro setup and more.

Euro Price Chart – EUR/USD Daily

Euro Price Chart - EUR/USD Daily - Euro vs US Dollar Trade Oulook - Technical Forecast

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

Technical Outlook: EUR/USD broke below a key technical support confluence last week at 1.1835/45 - a region defined by the August high-week reversal close, the 100% extension of the yearly decline and the 200-day moving average. The decline is now approaching the first majors support hurdle at the 38.2% Fibonacciretracement of the 2020 advance / 1.618% extension at 1.1695-1.1706- looking for possible inflection off this threshold with a close below needed to keep the focus on more significant support at the lower parallels / October 2018 high at 1.1622.

Euro Price Chart – EUR/USD 120min

Euro Price Chart - EUR/USD 120min - Euro vs US Dollar Trade Outlook - Technical Forecast

Notes: A closer look at Euro price action shows EUR/USD trading within an embedded descending pitchfork formation extending off February / March highs with the median-line further highlighting near-term support at 1.1695/1.1706. Initial resistance now back at 1.1754 backed by the weekly open at 1.1790. Bearish invalidation now lowered to 1.1835/45 - a breach / daily close above would be needed to suggest a more significant reversal is underway.

Bottom line: The Euro breakdown is now approaching the first hurdle at downtrend support and leave the bears vulnerable into the 1.17-handle. From a trading standpoint, look to reduce short exposure / lower protective stops on a stretch into this zone – be on the lookout for possible topside exhaustion ahead of 1.1845 IF price is indeed heading lower with a break exposing 1.1622. Keep in mind we’re heading into the close of the month / quarter tomorrow – stay nimble into the April open with NFPs on tap ahead of the extended holiday weekend. 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

Euro Trader Sentiment - EUR/USD Price Chart - Euro vs US Dollar Retail Sentiment - Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +1.17 (53.89% of traders are long) – neutral reading
  • Long positions are 1.67% lower than yesterday and 15.37% higher from last week
  • Short positions are 2.12% higher than yesterday and 8.05% 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 less net-long than yesterday but more net-long from last week and the combination of current positioning and recent changes gives us a further mixed EUR/USD trading bias from a sentiment standpoint.

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Key Euro / US Economic Data Releases

Key Euro / US Economic Data Releases - EUR/USD Economic Calendar - Euro Event Risk Ahead

Economic Calendar - latest economic developments and upcoming event risk.

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- Written by Michael Boutros, 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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