EUR/USD Weekly Price Outlook: Euro Trading Levels Heading Into 2019
EUR/USD is poised to close nearly 5% lower year-to-date with the pair trading just 1.5% off the 2018 lows. For months now, we’ve been tracking a key support pivot in Euro and the focus remains on a breakout of the consolidation range which has governed price since October. Here are the key targets & invalidation levels that matter on the EUR/USD weekly chart heading into the close of the year.
EUR/USD WEEKLY PRICE CHART
(Click on image to enlarge)
Notes: In our last EUR/USD Weekly Technical Outlook we noted that price was trading just above a key support pivot with, “the broader short-bias remains at risk while above this level - for now, I’ll be on the lookout for possible price exhaustion on a move towards 1.13 again.” Nearly three weeks later an Euro has continued to respect this threshold on a weekly close basis with price now testing the monthly range highs into the close of the year.
Key weekly resistance stands at 1.1586-1.16030 where the March trendline converges on the September outside-weekly reversal close (also the high week close) and the 61.8% retracement. A breach / close above this threshold is needed to suggest that a more significant low is in place with such a scenario targeting subsequent topside objectives at 1.1727 and the median-line / 52-week moving average / September high at 1.1800/15.
A close below 1.13 would mark resumption of the broader downtrend (and likely fuel accelerated losses) targeting the key 61.8% retracement of the 2017 advance at 1.1186 and pitchfork support, currently at ~1.1030.
Bottom line: Euro has continued to hold above the 1.13-support pivot with the broader short-bias still vulnerable while above this region heading into the close of the year. From a trading standpoint, I’ll continue to favor fading weakness while above targeting highlighted confluence resistance- look for a bigger reaction there IF reached for further guidance.
EUR/USD TRADER SENTIMENT
- A summary of IG Client Sentiment shows traders are net-short EUR/USD - the ratio stands at -1.28 (43.9% of traders are long) – bullish reading
- Long positions are 11.9% lower than yesterday and 5.6% lower from last week
- Short positions are 16.9% higher than yesterday and 0.9% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Euro prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger EUR/USD-bullish contrarian trading bias, from a sentiment standpoint.
Disclosure: Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment ...
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