The technical outlook remains constructive ahead of key U.S. economic data this week. Here are the updated targets & invalidation levels that matter into the releases.
- EUR/USD eyeing near-term resistance ahead of U.S. ISM Services
- Updated targets & invalidation levels
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Chart Created Using TradingView
Technical Outlook: EURUSD is trading within the confines of a median-line formation extending off the June / July lows with today’s rally now testing a key Fibonacci confluence at 1.1228/31. The immediate topside bias is vulnerable here but the trade remains constructive while above a pair of parallels which converge on the weekly opening-range low at 1.1155.
A breach higher targets the median-line parallel extending off the December low (~1.1250) backed by the descending upper median-line parallel extending off the yearly high (~1.1285).From a trading standpoint, I would be looking to fade euro weakness on a move lower with a break below 1.1076 needed to shift the broader focus back to the downside lower. For the complete setup and to continue tracking this trade& more throughout the week- Subscribe to SB Trade Deskand take advantage of the DailyFX New Subscriber Discount.
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- A summary of the DailyFX Speculative Sentiment Index (SSI)shows traders are net short EURUSD- the ratio stands at -2.01(33% of traders are long)–bullishreading
- Yesterday the ratio was -1.81. Short positions are 8.0% higher than yesterday and 53.7% above levels seen last week.
- Open interest is 4.2% higher than yesterday and 14.5% above its monthly average.
- SSI flipped to net short on last week as the exchange rate rebounded off structural support- constructive. An increase in long exposure on building open interest keeps the long-bias in play. That said, the pair is coming into key near-term resistance with the risk for a pullback before rallying to new highs
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Relevant Data Releases This Week
Other Setups in Play:
- EUR/JPY Into the Gauntlet- Chasm of Support Awaits
- AUDUSD Vulnerable to RBA – Technicals Remains Constructive Above 7495
- USDOLLAR Heavy on GDP- Monthly Opening Range to Hinge on NFP
- U.S. GDP Game Plan: EUR/USD Rebound Looks to Data for Fuel
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—Written by Michael Boutros, Currency Strategist with DailyFX
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