Euro Near Potentially Critical Support - Next Move is Key
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EURUSD – Retail FX traders recently turned net-long the Euro versus the US Dollar, and a contrarian view of ‘crowd’ sentiment leaves us in favor of further EUR/USD weakness. A key caveat is that positions have actually moderated since last week and a mere 51 percent of open positions are long. Ideally we would see a much larger swing towards crowd buying in order to call for a renewed downtrend.
In the meantime it will be important to watch how the Euro reacts to critical support near the $1.0870 mark. Our Senior Technical strategist writes that recent Euro price action suggests a major breakout or breakdown is imminent. If the EUR/USD does indeed break below a key 31-year trendline it seems likely the larger downtrend will resume.
See next currency section: GBPUSD - British Pound Likely to Fall, but Caution Advised
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.