Euro Technical Price Outlook: EUR/USD Weekly Trade Levels
- Euro updated technical trade levels & sentiment – Weekly Chart
- EUR/USD sell-off fizzles into yearly low-week close
- Weekly support 1.1760, 1.1695; Key resistance / bearish invalidation 1.2005
Euro fell more than 0.65% against the US Dollar this week with EUR/USD now eyeing critical support objectives just lower. While the risk remains for a deeper decline, the immediate sell-off may be vulnerable here as price stalls ahead of support near the yearly lows for a third consecutive week. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Euro technical setup and more.
Euro Price Chart – EUR/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview
Notes: In last month’s Euro Weekly Price Outlook we noted that EUR/USD had, “stalled at a key resistance confluence around the objective yearly open. From a trading standpoint, the March rally remains vulnerable while below this zone” The technical zone in focus was 1.2219/39- a region defined by the yearly high-week close and the objective 2021 open. Euro plunged more than 4% in the following weeks with a break below the 2020 trendline / 52-week moving average in June threatening a larger breakdown here.
Initial weekly support is seen just lower with the objective yearly low-week close at 1.1760 backed by the 38.2% Fibonacci retracement of the 2020 advance at 1.1695 and 2016 high / 100% extension of the yearly decline at 1.1616/21- both areas of interest for possible downside exhaustion IF reached. Weekly resistance stands with the 52-week moving average at 1.1953 with bearish invalidation set to the 2018 open / 61.8% extension of the 2017 advance 1.2005.
Bottom line: A break below yearly uptrend support threatens a larger Euro breakdown- that said, the decline may be vulnerable near-term as price approaches the yearly close-lows. From a trading standpoint, a good region to reduce short-exposure / lower protective stops – look for topside exhaustion ahead of the 1.20-handle IF price is heading lower with a break of the objective yearly opening-range lows risking further Euro losses. Keep in mind the European Central Bank (ECB) interest rate decision is on tap next week- stay nimble. I’ll publish an updated Euro Price Outlook once we get further clarity on the EUR/USD near-term 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-long EUR/USD - the ratio stands at +1.26 (55.69% of traders are long) – weak bearish reading
- Long positions are2.69% higher than yesterday and 5.30% higher from last week
- Short positions are6.40% lower than yesterday and 0.51% higher 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 further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger EUR/USD-bearish contrarian trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | -1% | -4% | -3% |
| Weekly | 4% | -10% | -5% |
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--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
