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EUR/USD Weekly Technical Perspective– Euro Defends 2018 Lows

On this collection we scale-back and try the broader technical image to achieve a bit extra perspective on the place we’re in pattern. Euro responded to a key technical assist confluence late-last month with the primary day of November commerce on tempo to submit the most important single-day advance since late-September. Here are the important thing targets & invalidation ranges that matter on the EUR/USD weekly chart. Assessment this week’s Technique Webinar for an in-depth breakdown of this setup and extra.

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EUR/USD Weekly Worth Chart

EUR/USD Weekly Price Chart

Notes: In October’s EUR/USD Weekly Technical Perspective, we examined the specter of additional losses for the Euro with our ‘backside line’ noting that, “A break / shut beneath (1.1498) would invalidate the reversal play with such a situation concentrating on the yearly low-week shut at 1.1436 backed by the 200-week transferring common / slope assist at ~1.1330 and the 1.13deal with.” A late-break of the month-to-month opening-vary lows fueled accelerated losses with worth registering a low at 1.1302 on the final day of October commerce. So was remaining washout?

The jury continues to be out, however there are some attention-grabbing technicals observations to think about. Notice that the US Greenback Index (DXY) registered a contemporary yearly low this week whereas EUR/USD didn’t (neither did GBP/USD for that matter). This divergence in worth is commonly exhibited at main market turns / reversals and will increase the specter of worth exhaustion. Additionally be aware that sentiment has reversed from extremes in net-long positioning not seen since April 2017- which ended up being the origin of the 2017 advance.

Whereas these observations are fairly compelling, it doesn’t imply the bulls are out of the woods simply but. A break / weekly shut sub-1.13 would depart Euro weak to additional losses with such a situation concentrating on 61.eight% retracement of the 2017 advance in addition to the at 1.1186 backed by broader bullish invalidation on the slope confluence close to 1.10.

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Backside line: EUR/USD has responded to long-term uptrend support-confluence at 1.13– a area outlined by the November 2016 swing excessive, the 2018 swing low and the 200-week transferring common. Watch the weekly shut – a break / shut above the August low-week shut at 1.1436 can be wanted to alleviate a number of the stress right here with subsequent resistance eyed on the September high-week reversal shut at 1.1603. Broader bearish invalidation is regular on the 38.2% retracement of the yearly vary at 1.1780.

From a buying and selling standpoint, a great place to cut back short-exposure / decrease protecting stops and be looking out for indicators of exhaustion early within the month. US Non-Farm Payrolls are on faucet tomorrow with the Mid-term Elections and the FOMC rate of interest determination looming subsequent week. Keep nimble into the month-to-month open- I’d count on failure quite early within the month if this rebound is only a fake-out. I’ll publish an up to date EUR/USD scalp report as soon as we get additional readability on near-term worth motion.

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EUR/USD Dealer Sentiment

EUR/USD Trader Sentiment

A abstract of IG Shopper Sentiment exhibits merchants are net-long EUR/USD – the ratio stands at +1.78 (64.1% of merchants are lengthy) – bearish studying

Traders have remained net-long since October 1st; worth has moved 1.7% decrease since then

Lengthy positions are9.9% decrease than yesterday and a couple of.four% increased from final week

Quick positions are 2.5% decrease than yesterday and 18.three% decrease from final week

We sometimes take a contrarian view to crowd sentiment, and the actual fact merchants are net-long suggests EUR/USD costs could proceed to fall. Nevertheless dealer are much less net-long than yesterday however extra net-long from final week and the mixture of present positioning and up to date adjustments provides us an additional blended EUR/USD buying and selling bias from a sentiment standpoint.

See how shifts in EUR/USD retail positioning are impacting trend- Learn extra about sentiment!

Related EUR/USD Information Releases

EUR/USD Economic Calendar

Financial Calendar– for the latest economic developments and upcoming occasion risk. Study extra about how we Commerce the Information in our Free Information!

Earlier Weekly Technical Charts

Discover ways to Commerce with Confidence in our Free Buying and selling Information

— Written by Michael Boutros, Technical Forex Strategist with DailyFX

Comply with Michael on Twitter @MBForex or contact him at mboutros@wiadforex.com


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