- Updated weekly technicals for EUR/USD- price testing critical support pivot at 1.16
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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
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
- 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
Economic Calendar - for the l atest e conomic d evelopments and u pcoming event ri sk
Previous Weekly Technical Perspectives
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--- Written by Michael Boutros , Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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