Euro Technical Price Outlook: EUR/USD Weekly Trade Levels
- Euro updated technical trade levels & sentiment – Weekly Chart
- EUR/USD breakout approaching initial topside resistance objectives
- Key resistance into 1.2409 – Bullish invalidation raised to 1.1823/35
Euro has rallied nearly 5% off the November lows against the US Dollar with a breakout in EUR/USD stretching to fresh yearly highs into the December open. The breakout is a manifestation of the 2020 opening-range breakout registered back in July and while the outlook remains weighted to the topside, waning sentiment warns of possible exhaustion in the weeks ahead. 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 Loonie technical setup and more.
Euro Price Chart – EUR/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview
Notes: In my last Euro Weekly Price Outlook we noted that EUR/USD had, “reversed off confluence downtrend resistance with the decline now approaching lateral support near the 1.16–handle.” Price registered a low at 1.1602 before marking an outside-weekly reversal with the subsequent rally breaking to multi-year highs into the December open.
The breakout is now testing initial resistance at the 78.6% Fibonacci retracement of the 2018 decline at 1.2148 with momentum still marking weekly divergence with the September highs. A topside breach / close above this level keeps the focus on subsequent objectives at channel / parallel resistance (red- currently near 1.2220s) backed by the 88.6% retracement at 1.23378 and the 2018 high-week close at 1.2409– both levels of interest for possible topside exhaustion IF reached. Initial weekly support now rests with the 2018 yearly open / 61.8% extension at 1.2005 with broader bullish invalidation now raised to 1.1823/35.
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Bottom line: The Euro breakout has already extended into initial resistance objectives and while the immediate rally may be vulnerable here near-term, the outlook remains weighted to the topside while above 1.1835. From at trading standpoint, a good zone to reduce long-exposure / raise protective stops – losses should be limited to 1.2005 IF price is heading higher on this stretch. Be on the lookout for possible exhaustion into the upper parallels heading deeper into the month. 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
- A summary of IG Client Sentiment shows traders are net-short EUR/USD – the ratio stands at -2.46 (28.9% of traders are long) –typically bullish reading
- Long positions are3.06% higher than yesterday and 3.29% higher from last week
- Short positions are5.24% lower than yesterday and 15.24% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Traders are less net-short than yesterday but more net-short 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 | 4% | -3% | -1% |
| Weekly | 3% | 14% | 11% |
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Previous Weekly Technical Charts
— Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
