Euro Technical Price Outlook: EUR/USD Weekly Trade Levels
- Euro updated technical trade levels & sentiment – Weekly Chart
- EUR/USD plunges into support at yearly lows- major event risk on tap into extended holiday break
- Weekly support 9901 (key), 9850s, 9548-9595; resistance 1.0086, 1.0190 (critical), 1.0340
Euro plummeted more than 4.5% off the August highs against the US Dollar with EUR/USD holding within the 2022 yearly downtrend. A three-week sell-off is now testing technical support at the yearly lows with US Non-Farm Payrolls (NFP) on tap – the battle lines are drawn heading into the September open as we look for possible price inflection off this mark. 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 Forecast we noted that the EUR/USD, “recovery off downtrend support remains in focus with the threat of a larger correction early in the month- we’re on the lookout for a medium-term high. From a trading standpoint, look to reduce long-exposure / raise protective stops on a push towards the downtrend resistance…” Euro rallied into the August open with price testing resistance at the yearly downtrend / 2017 low at 1.0340 (price registered an intra-week high at 1.0368) before turning sharply lower. The decline is now testing support at the 78.6% retracement of the 2000 rally around the 99-handle with longer-term slope support just lower (red trendline near ~9850s). Price is approaching this key threshold into the start of the month on building momentum divergence with major event risk on tap ahead of an extended holiday break. Needless to say, we’re looking for a reaction down here.
A break below this slope would be technically damaging for Euro and the break of downtrend support would threaten a bout of accelerated losses towards the 1989 low / 2001 high at 9548-9595- look for a larger reaction in price there IF reached. Initial weekly resistance eyed at the July low-week close at 1.0086 backed by the 61.8% Fibonacci retracement of the August sell-off at 1.0190- a breach / weekly close above this threshold would be needed to suggest a more significant medium-term low is in place.
Bottom line: Euro is testing lateral support at the 99-handle within the yearly downtrend into the September open. The focus is on possible price inflection off this mark. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be capped by 1.0190 IF price is heading lower on this stretch with a close below the 2008 slope needed to fuel the next leg lower in price. Keep in mind the ECB interest rate decision is on tap next week- stay nimble into the monthly opening-range. A Review my latest Euro Short-term Price Outlook for a closer look at the near-term EUR/USD 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 +2.19 (68.62% of traders are long) – typically a bearish reading
- Long positions are0.94% higher than yesterday and 7.57% lower from last week
- Short positions are9.62% lower than yesterday and 0.77% 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 more net-long than yesterday but less net-long from last week. The combination of current positioning and recent changes gives us a further mixed EUR/USD trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 18% | -12% | 3% |
| Weekly | -1% | 0% | -1% |
---
Eurozone / US Economic Calendar
Economic Calendar - latest economic developments and upcoming event risk.
Previous Weekly Technical Charts
- Crude Oil (WTI)
- British Pound (GBP/USD)
- US Dollar Index (DXY)
- Gold & Silver
- S&P 500, Nasdaq, Dow
- Canadian Dollar (USD/CAD)
- US Dollar Index (DXY)
--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
