Euro Technical Price Outlook: EUR/USD Near-term Trade Levels
- Euro updated technical trade levels – Daily & Intraday Charts
- EUR/USD rebound off downtrend support now targeting downtrend resistance
- Resistance 1.1109, 1.150, 1.1221/31 (key) – Support 1.0920/26, 1.0814/31 (critical)
Euro nearly 3% this week against the US Dollar before pulling back with a rebound off technical support now in focus. With no surprises from the ECB today, the focus shifts to the ongoing Russian invasion of Ukraine as the world braces for the potential for a larger conflict. From a trading standpoint, the levels are clear and we’re on the lookout for possible exhaustion high in the days ahead. These are the updated targets and invalidation levels that matter on the EUR/USD technical price charts heading into the close of the week. Review my latest Strategy Webinar for an in-depth breakdown of this Euro technical setup and more.
Euro Price Chart – EUR/USD Daily
Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview
Technical Outlook: In last month’s Euro Price Outlook we noted that, “A V-shaped recovery takes EUR/USD back into confluent downtrend resistance- looking for possible price inflection here…” What an inflection it was! Euro grinded into the upper parallel for weeks before reversing sharply lower with a break of the yearly opening range fueling a decline of nearly 6% off the February highs. Price found support this week at a critical technical confluence near the 25% parallel at 1.0814/31- a region defined by the 88.6% retracement of the 2020 advance and the 78.6% retracement of the broader. So, is a near-term low in place?
Euro Price Chart – EUR/USD 240min
Notes: A closer look at Euro price action shows EUR/USD trading within the confines of descending pitchfork formation extending off the January / February highs. Again note here the positioning of the lower parallel at 1.0814/31 early this week. The focus is now shifts to this rebound off downtrend support with a two-day rally faltering at the first resistance threshold today at 1.1109. Subsequent resistance objectives are eyed just higher at 1.1150 and the December low / 61.8% Fibonacci retracement of the year-to-date range at 1.1217/31 – price should not exceed this threshold IF EUR/USD is indeed heading lower.
Initial support rests with this weekly trendline (red) backed by the weekly open / 61.8% retracement of the weekly rally at 1.0920/26- weakness beyond this zone would likely fuel another accelerated decline with a break of the lows exposing the 2020 low-day close / the lower parallel near 1.0726.
Bottom line: EUR/USD has rebounded off downtrend support and we’re looking for a reaction on a stretch towards downtrend resistance for guidance. From at trading standpoint, be on the lookout for an exhaustion high ahead of 1.1217/31 with a close below the weekly open needed to fuel the next leg lower in price. I’ll publish an updated Euro Weekly Price Outlook once we get further clarity on 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-long EUR/USD - the ratio stands at +1.46 (59.41% of traders are long) – typically weak bearish reading
- Long positions are 13.73% lower than yesterday and 15.51% lower from last week
- Short positions are16.21% higher than yesterday and 7.46% 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. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse higher despite the fact traders remain net-long.
| Change in | Longs | Shorts | OI |
| Daily | -5% | 4% | -2% |
| Weekly | -4% | -9% | -6% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
