Euro Price Outlook: EUR/USD Snap Back- Trade or Fade?

Euro has rallied scarcely 0.6% opposite a US Dollar given a start of a week with a cost liberation now contrast monthly open insurgency streamer into a tighten of Apr trade. These are a updated targets and cancellation levels that matter on a EUR/USD charts this week with a FOMC NFPs on tap. Review this week’s Strategy Webinar for an in-depth relapse of this setup and more.

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EUR/USD Daily Price Chart

EUR/USD Price Chart - Euro vs US Dollar Daily

Technical Outlook: In my latest EUR/USD Weekly Technical Outlook we remarkable that cost was coming weekly support during 1.1186, “with a mangle subsequent a 2017 pitchfork support around ~1.1130s indispensable to countenance a incomparable mangle of a multi-year uptrend arrangement in Euro.” Price purebred a low during 1.1111 before reversing neatly aloft to tighten behind above pitchfork support final week.

Look for initial support during 1.1186 with near-term bullish cancellation now set to a yearly low-day tighten during 1.1139– a tighten subsequent this threshold is indispensable to symbol resumption of a broader downtrend targeting a reduce together and channel support, now around ~1.11. Confluence daily insurgency stands during 1.1228/39 where a median-line converges on a monthly open and a 38.2% retracement. A crack / tighten above would be indispensable to advise a some-more poignant low is in place.

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EUR/USD 120min Price Chart

EUR/USD Price Chart - Euro vs US Dollar 120minute

Notes: A closer demeanour during cost movement shows Euro contrast monthly open insurgency currently during 1.1228 after breaching above near-term trendline insurgency fluctuating off a monthly highs. Look for depletion forward of 1.1175 IF this dermatitis is legit with a crack above a 61.8% retracement during 1.1242 indispensable to fuel a subsequent leg aloft in price. Subsequent topside objectives during ~1.1280 and a Apr high-day tighten during 1.1299 – design a bigger greeting there IF reached.

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Bottom line: Euro has responded to longer-term slope support and cost needs to reason above a low-day tighten to keep a long-bias viable. From a trade standpoint, a evident risk is for a pullback here though we’re looking for downside depletion while above 1.1175. Keep in mind we’re streamer into a start of a new month with a FOMC and US Non-Farm Payrolls (NFP) on tap- stay nimble here.

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EUR/USD Trader Sentiment

EUR/USD Trader Sentiment - Euro vs US Dollar Price Chart

  • A outline of IG Client Sentiment shows traders are net-long EUR/USD- a ratio stands during +1.27 (55.9% of traders are long) – diseased bearishreading
  • Traders have remained net-short given April 12th; cost has changed 0.5% lower given then
  • The commission of traders net-long is now a lowest given April 17th
  • Long positions are24.0% reduce than yesterday and 6.1% reduce from final week
  • Short positions are31.9% aloft than yesterday and 0.9% reduce from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests Euro prices might continue to fall. Yet traders are reduction net-long than yesterday compared with final week and therecent changes in view advise that a stream EUR/USD cost trend might shortly retreat higher, notwithstanding a fact traders sojourn net-long.

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Relevant Euro / US Economic Data Releases

Euro / US Economic Calendar

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– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex