EUR/USD Rally Vulnerable Ahead of NFP- Pullback to Offer Opportunity

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Talking Points

EUR/USD Daily Chart

EURUSD Daily Price Chart

Technical Outlook: Euro stretched into a pitchfork insurgency yesterday, capping a weekly allege near-term. The 2010 low comes in only aloft during 1.1876– a long-bias is during risk streamer into these levels and we’re on a surveillance for probable near-term depletion into a Aug open.

Interim support rests along a 75% line around (currently ~1.17) with broader bullish cancellation solid during a 2016 high-day tighten during 1.1495. In a eventuality of a topside breach, demeanour for insurgency targets during a longer-term median-line fluctuating off a Feb highs (currently ~1.2040) corroborated by 1.2167.

Learn some-more about Pitchfork Median-line formations in Michael’s three-part trade series

EUR/USD 120min Chart

EURUSD 120min Price Chart

Notes: An embedded descending channel off a 7/13 low serve highlights a aforementioned insurgency levels with evident support eyed during final week’s high during 1.1777 corroborated by 1.1714. A mangle next a figure is indispensable to advise a incomparable improvement is underway targeting 1.1616 a median-line (currently ~1.1540).

Keep in mind we still have a recover of U.S. Non-Farm Payrolls (NFP) on Friday that could offer a good understanding of sensitivity in a USD crosses. From a trade standpoint, I’m looking for near-term depletion adult here though ultimately, we’d be looking for long-entries on a some-more suggestive pullback into constructional support.

EUR/USD Rally Vulnerable Ahead of NFP- Pullback to Offer OpportunityEUR/USD Rally Vulnerable Ahead of NFP- Pullback to Offer Opportunity

EURUSD IG Client Sentiment

  • A outline of IG Client Sentimentshows traders are net-short EUR/USD- a ratio stands during -2.7 (27.0% of traders are long) – bullishreading
  • Retail traders have been net-short given Apr 18th- Price has changed 10.6% aloft given then
  • Long positions are 12.0% aloft than yesterday and 3.2% higher from final week
  • Short positions are 4.8% reduce from yesterday and 7.9% reduce from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests EURUSD prices might continue to rally. That said, retailless net-short than yesterday and compared with final week and the multiple of stream positioning and new changes warn that a stream Euro cost trend might shortly retreat reduce notwithstanding a fact traders stays net-short.

What to demeanour for in EUR/USD retail positioning – Click here to learn more about sentiment!

Relevant Data Releases

Economic Docket

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– Written by Michael Boutros, Currency Strategist with DailyFX

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