News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Euro Technical Price Outlook: EUR/USD Rips Towards Trend Resistance

Euro Technical Price Outlook: EUR/USD Rips Towards Trend Resistance

Michael Boutros, Strategist

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

  • Euro updated technical trade levels – Daily & Intraday Charts
  • EUR/USD rebound off downtrend support on course for test of downtrend resistance
  • Resistance 1.1180, 1.1221/31 (key), 1.1271– Support 1.1043, 1.10 (key), 1.0919, 1.0814/31 (critical)
Advertisement

Euro rallied more than 1.9% against the US Dollar since the start of the week with EUR/USD surging on the heels of yesterdays FOMC interest rate decision. The bulls haven’t grasped control just yet as the rally keeps price within the broader yearly downtrend- we’re looking for a reaction in price just higher in the days ahead for guidance. 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

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

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

Technical Outlook:In last week’s Euro Price Outlook we noted that, “EUR/USD has rebounded off downtrend support and we’re looking for a reaction on a stretch towards downtrend resistance for guidance.” The stretch continues with Euro now more than 3% off the monthly / yearly lows. The focus now shifts to initial resistance here at the 75% parallel with key resistance eyed just higher at the 100% extension / December low / 61.8% Fibonacci retracement of the year-to-date range at 1.1215/31- looking for a larger reaction there if reached with the near-term outlook higher while within this channel (red).

Euro Price Chart – EUR/USD 120min

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

Notes: A closer look at Euro price action shows EUR/USD trading within the confines of a near-term ascending pitchfork formation extending monthly lows. A breakout above the median-line today keeps the focus on the upper parallels (near ~1.1180s) and key resistance at 1.1215/31- ultimately a breach / close above the February uncovered gap close at 1.1271 would be needed to validate a larger reversal. Initial support now rests at 1.1043 with near-term bullish invalidation raised to the lower parallel around currently ~1.10. A break below weekly open support at 1.0919 would be needed to mark resumption of the broader downtrend towards 1.0814/31.

Bottom line: The Euro recovery is on course with the advance now taking EUR/USD towards broader downtrend resistance- we’re on the lookout for a possible exhaustion high in the days ahead. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards the upper parallels- losses should be limited to 1.10 IF price is indeed heading higher with a close above 1.1271 needed to suggest a more significant low is in place. 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

Euro Trader Sentiment - EUR/USD Price Chart - Euro vs US Dollar Retail Positioning - EURUSD Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +1.42 (58.74% of traders are long) – typically weak bearish reading
  • Long positions are 4.18% lower than yesterday and 1.51% higher from last week
  • Short positions are 14.55% higher than yesterday and 6.46% 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.

---

Euro / US Economic Calendar

Euro / US Economic Calendar - EUR/USD Key Data Releases

Economic Calendar - latest economic developments and upcoming event risk

Active Technical Setups

- Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES