Euro Technical Forecast: EUR/USD Slams into Support at 2020 Lows

EURO TECHNICAL PRICE OUTLOOK: EUR/USD WEEKLY TRADE LEVELS

  • Euro updated technical trade levels & sentiment – Weekly Chart
  • EUR/USD plunges into downtrend support at multi-year lows– risk for price inflection
  • Weekly support 1.637/56(critical), 1.0532, 1.0449; resistance 1.0831, 1.0936, 1.1103(key)

Euro plummeted more than 7.4% off the yearly highs against the US Dollar with the EUR/USD breakdown plunging into support at the 2020 swing lows- the first major hurdle for the bears. While the broader outlook remains tilted to the downside, we’re looking for possible inflection off this zone in the days ahead for guidance. 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

Euro Price Chart - EUR/USD Weekly - Euro vs US Dollar Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview

Notes:In my last Euro Weekly Price Forecast we warned that EUR/USD was, “trading within a well-defined range just above downtrend support at the yearly lows. From at trading standpoint the focus is on a breakout of the 1.0831 – 1.1170 range for guidance with the broader threat weighted to the downside while below 1.1222.” A downside break mid-month unleashed the next leg lower in price with EUR/USD plunging another 1.5% to test critical support this week at 1.0637/56– a region defined by the March 2017 high-week reversal-close and the objective 2020 swing low. Looking for possible price inflection here.

Initial resistance now eyed at the 88.6% Fibonacci retracement of the 2020 advanceat 1.0831 backed by last week’s high at 1.0936– both levels of interest of possible topside exhaustion IF reached. Broader bearish invalidation at the 2020 March high-week close at 1.1103. A break / close lower from here keeps the focus on subsequent support objectives at the 2017 low-week close at 1.0531 and the 2016 low-week close at 1.0449– look for a larger reaction there IF reached.

Bottom line: The Euro sell-off is now testing confluent downtrend support at 1.0637/56 – while the broader outlook remains weighted to the downside, the immediate decline may be vulnerable into this threshold. From at trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – rallies should be capped by last week’s high IF price is heading lower with a weekly close sub-1.0637 needed to mark resumption to fresh multi-year lows. Stay tuned. . .Review my latest Euro 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

Euro Trader Sentiment - EUR/USD Price Chart - Euro vs US Dollar Retail Positioning - EURUSD Technical Outlook

  • A summary of IG Client Sentiment shows traders are net-long EUR/USD – the ratio stands at +3.07 (75.41% of traders are long) – typically a bearish reading
  • Long positions are7.80% higher than yesterday and 1.99% higher from last week
  • Short positions are0.94% higher than yesterday and 10.77% 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 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.
EUR/USDBEARISH

Data provided by

 of clients are net long.
CHANGE IN LONGS SHORTS OI
DAILY 2% -7% 0%
WEEKLY 3% -22% -4%
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EUROZONE / US ECONOMIC CALENDAR

Eurozone / US Economic Calendar - EUR/USD Key Data Releases - Weekly Event Risk

Economic Calendar – latest economic developments and upcoming event risk.

PREVIOUS WEEKLY TECHNICAL CHARTS

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— Written by Michael Boutros, Technical Strategist with DailyFX