In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro is down nearly 0.5% against the US Dollar this week with the recent recovery in price turning from long-term slope resistance. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.
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EUR/USD Weekly Price Chart
Notes: In my previous EUR/USD Weekly Technical Outlook we highlighted a critical support confluence at the 61.8% retracement of the 2017 advance around 1.1187 – Euro has continued to respect this threshold on for the past two-months with the recent price recovery turning just ahead of confluence resistance this week. Note that a multi-month RSI support trigger is in play as we head into the close of the week.
Confluence resistance stands with the 200-week moving average around ~1.1338 – note that a pair of trendlines from 2018 highs also converges on this zone and further highlight the technical significance of this threshold. A breach / close above is needed to shift the focus higher targeting yearly open resistance at 1.1445 and the 52-week moving average at ~1.15. Weekly support remains at 1.1886 with a break below the 2017 pitchfork support around 1.1130s needed to validate a larger break of the multi-year uptrend formation in Euro.
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Bottom line: Euro remains within the confines of a critical range between key technical confluences art 1.1186 – 1.1337 and we’re looking for the break for guidance. From a trading standpoint, the expect sideways to lower price-action near-term towards the lower bounds– ultimately, we’re only targeting levels within this range until we clear this zone. I’ll publish and updated EUR/USD Price Outlook once we get further clarity in near-term price action.
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EUR/USD Trader Sentiment
- A summary of IG Client Sentiment shows traders are net-long EUR/USD – the ratio stands at +1.48 (59.7% of traders are long) – bearish reading
- Long positions are 9.7% higher than yesterday but 7.5% lower from last week
- Short positions are 21.4% lower than yesterday and 12.3% lower 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 further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger EUR/USD-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in EUR/USD retail positioning are impacting trend- Learn more about sentiment!
Relevant Euro / US Economic Data Releases
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Previous Weekly Technical Charts
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— Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex