Euro Technical Price Outlook: EUR/USD Near-term Trade Levels
- Euro updated technical trade levels – Daily & Intraday Charts
- EUR/USD in consolidation within weekly / monthly range- breakout pending
- Support 1.0500, 1.1.0462, 1.0352/85(key) – Resistance 1.0637(key), 1.0726, 1.0862
Euro has been in a tug-of-war with the US Dollar since the start of the month with EUR/USD continuing to contract within the monthly opening-range at fresh multi-year lows. While the broader outlook remains weighted to the downside, a rebound off downtrend support keeps the immediate focus on a breakout of this near-term range for guidance 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 EUR/USD was “Euro is threatening a much larger breakdown IF price is able to stabilize below 1.0814/31 in the days ahead- exhaustion risk here is high.” Price continued to straddle this zone for more than a week before taking a leg lower with the decline registering a low just pups ahead of confluent downtrend support at the 2015 lows at 1.0462. Monthly & weekly opening range have taken shape just above and we’re looking for the breakout for guidance in the days ahead.
Euro Price Chart – EUR/USD 240min
Notes: A closer look at Euro price action shows EUR/USD continuing to trade within the confines the descending pitchfork formation extending off the late-March highs. Note that price is contracting within the weekly / May opening-range just above monthly-open support at 1.0500. Ultimately a break / close below the 1.0462 would be needed to mark resumption towards subsequent support objectives at the lower parallel / 2016 low & low-day close at 1.0352/85- look for a larger reaction there IF reached. A topside breach of the range exposes initial resistance at the median-line / 2020 low at 1.0637- a breach / close above this threshold would be needed to suggest a larger correction is underway with broader bearish invalidation lowered to the March low-day close / 38.2% Fibonacci retracement of the yearly range at 1.0852/62.
Bottom line: Euro has rebounded off downtrend support with the monthly & weekly opening-range preserved heading into Thursday- we’re on breakout watch. From a trading standpoint, the threat remains tilted to the downside while below 1.0637 near-term- look to reduce short-exposure / lower protective stops on a stretch towards 1.0352/85 IF reached. Review my latest Euro Weekly Price Outlook for a closer 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
- A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +2.67 (72.72% of traders are long) – typically bearish reading
- Long positions are 1.85% lower than yesterday and 8.71% lower from last week
- Short positions are 4.08% lower than yesterday and 1.57% 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 more net-long than yesterday but less net-long from last week. The combination of current positioning and recent changes gives us a further mixed EUR/USD trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | -8% | 9% | -2% |
| Weekly | 4% | 10% | 6% |
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- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
