Euro Technical Price Outlook: EUR/USD Weekly Trade Levels
- Euro updated technical trade levels & sentiment – Weekly Chart
- EUR/USD sell-off approaching key support hurdles near the 2021 yearly lows
- Weekly support 1.1695, 1.1616 critical; Resistance around 1.1880s / bearish invalidation 1.2005
Euro is poised for a second weekly decline (eight consecutive days) against the US Dollar with EUR/USD down more than 0.3% to trade at 1.1719 on Tuesday in New York. The decline takes price towards the major support at the yearly lows and we’re on the lookout for possible inflection in the days ahead with the bears at risk heading into the 1.17handle / US inflation data tomorrow. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Euro technical setup and more.
Euro Price Chart – EUR/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview
Notes: In last month’s Euro Weekly Price Outlook we noted that, “A break below yearly uptrend support threatens a larger Euro breakdown- that said, the decline may be vulnerable near-term as price approaches the yearly close-lows.” EUR/USD held above the low-week close at 1.1760 for four consecutive weeks before breaking lower on Friday. The decline takes Euro into the objective yearly range lows / 38.2% % Fibonacci retracement of the 2020 advance at 1.1695- note that the 25% parallel of the descending pitchfork also converges on this threshold and further highlights the technical significance of this lateral support zone- looking for inflection off this zone.
Initial resistance rests with the median-line, currently near 1.1880s backed by the 100-day moving average at 1.1955. Broader bearish invalidation now lowered to 1.2005. A break lower from here exposes an even more significant confluent support zone at the 2016 high / 100% extension at 1.1616/21- look for a larger reaction there IF reached.
Bottom line: The Euro sell-off is now approaching key support into the yearly lows at 1.1695 and we’re looking for guidance off this mark. From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch into this support zone – rallies should be capped by the August open at 1.1867 IF price is heading lower. I’ll publish an updated Euro Price Outlook once we get further clarity on the EUR/USD near-term technical trade levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Euro Trader Sentiment – EUR/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +1.77 (63.86% of traders are long) – typically bearish reading
- Long positions are2.10% higher than yesterday and 21.54% higher from last week
- Short positions are 9.06% higher than yesterday and 19.47% 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. Trader are less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed EUR/USD trading bias sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 0% | 6% | 3% |
| Weekly | -16% | 15% | -4% |
---
Key Eurozone / US Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Previous Weekly Technical Charts
- Gold (XAU/USD)
- US Dollar Index (DXY)
- Australian Dollar (AUD/USD)
- New Zealand Dollar (NZD/USD)
- Canadian Dollar (USD/CAD)
- Sterling (GBP/USD)
- Japanese Yen (USD/JPY)
--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
