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)
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
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
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
- 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.
| Change in | Longs | Shorts | OI |
| Daily | -8% | -11% | -9% |
| Weekly | -15% | 25% | -4% |
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- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
