EUR/USD Daily Chart
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EUR/USD Eyes 1.0580 Support Ahead of 4Q GDP

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Talking Points

  • EURUSD r eversal looks to US GDP - Immediate focus lower sub-1.0730
  • Updated targets & invalidation levels
  • Looking for more trade ideas? Review DailyFX's 2017 Trading Guides . Join Michael for Live Weekly Trading Webinar s on Mondays at 13:30GMT (8:30ET)

EUR/USD Daily

Technical Outlook: Eur o reversed off parallel resistance extending off the December high this week- Note that the slope of this trendline originates from the broader descending median-line formation extending off the 2016 highs. A hold in daily RSI sub-60 also highlights the threat to the advance off the monthly lows.

EUR/US D 120min

Notes: A c loser look at price action shows Euro trading within the confines of a near-term ascending pitchfork formation extending off the December lows. Note that the break below the median-line / weekly open shifts the near-term focus lower with the decline already taking out initial targets at 1.0672 . Subsequent support objectives at the 50-line (currently ~ 1.0650 ), the 38.2% retracement at 1.0609 & the lower parallel at 1.0580 - area of interest for possible exhaustion / long-entries.

Consensus estimates are calling for a 2.2% q/q clip for US 4Q GDP, down from a previous read of 3.5%. Even though the tomorrow's release is expected to highlight a slowdown in both growth & inflation, the data is unlikely to move the needle as it pertains to monetary policy with Fed Fund Futures still pricing in a 74% probably for an interest rate hike in June. That said, from a trading standpoint, heading into the release I would be looking to fade strength while below the monthly / yearly high-day close at 1.0730 with a move lower targeting downside objectives into structural support.

  • A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are short EUR/USD - the ratio stands at -1.22 (45% of traders are long)- weak bullish reading
  • Long positions are 21.2% higher than yesterday and 10.8% above levels seen last week
  • Short positions are 14.4% lower than yesterday but 12.9% above levels seen last week
  • Open interest is 1.3% lower than yesterday but remains 12.6% above its monthly average
  • The current dynamic of building long interest highlights the risk of further near-term weakness in price as the ratio continues to narrow from recent extremes of -1.77. Look for a flip to net long in the coming days to suggest that a more significant reversal is underway.

Relevant Data Releases

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Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex contact him at mboutros@dailyfx.com or Clic k H ere to be added to his email distribution list .

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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