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Markets

Weekly Technical Perspective on Euro vs US Dollar (EUR/USD)

DailyFX.com -

In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro has been in trading within a broad consolidation pattern for the past two months with price now attempting to break below a critical support zone we've been tracking. Here are the key targets & invalidation levels that matter on the EUR/USD weekly chart.

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EUR/USD Weekly Price Chart

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Notes: We've been tracking a key support barrier in EUR/USD around 1605 , " where the October low-close converges on the median-line of the broader ascending pitchfork formation and basic trendline support extending off the 2016 low. " An eight-week consolidation period has prices testing the lower bounds today and a weekly close below this threshold would risk further losses for the single currency.

A break here target the 50% retracement of the 2017 advance which converges on a sliding parallel (red) at 1.1448 . Monthly open resistance stands at 1.1691 with bearish invalidation steady at 1.1908/16 . Note that a weekly RSI resistance trigger extending off the yearly highs remains in play.

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Bottom line: EUR/USD is testing a make-or-break level here and our focus is on the weekly close. Failure to press lower would leave the short-bias vulnerable heading into next week. From a trading standpoint, we're on the sidelines until we can confirm the breakdown / rebound off this mark. I'll publish an updated EUR/USD scalp report once we get some more clarity on near-term price action.

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EUR/USD Trader Sentiment

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  • A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +1.54 (60.7% of traders are long) - bearish reading
  • Long positions are 12.3% higher than yesterday and 1.4% higher from last week
  • Short positions are 5.0% lower than yesterday and 12.1% 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 and 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- Le arn more about sentiment!

Relevant EUR/USD Data Releases

EUR/USD Econoimc Calendar

Economic Calendar - for the l atest e conomic d evelopments and u pcoming event ri sk

Previous Weekly Technical Perspectives

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

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com

https://www.dailyfx.com/free_guide-tg.html?ref-author=Boutros

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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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