- EUR/USD rally eyeing initial topside targets- Outlook constructive while above monthly open
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Euro has rallied scarcely 1.4% after resilient off pivotal connection support final week and a medium-term opinion stays weighted to a topside while above a Apr open. The allege is coming some near-term insurgency targets that might offer a pullback in price- here are a levels to know.
EUR/USD Daily Price Chart
Technical Outlook: In this week’s Technical Perspective, we highlighted a connection support section in EURUSD around ~1.2230 where simple channel support converges on a 61.8% prolongation of a decrease off a yearly highs. Price posted an outside-day annulment off this turn with a convene violation behind above a monthly open / opening-range highs. Daily insurgency targets are eyed during a 2018 high-day tighten during 1.2709 backed by a Jan trendline insurgency ~1.2440s- a crack above this levels would be indispensable to symbol resumption of a broader uptrend. Key support now behind during a low-day tighten during 1.2279.
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EUR/USD 120min Price Chart
Notes: A closer demeanour during cost movement see’s EUR/USD trade within a proportions of an ascending channel arrangement fluctuating off a monthly lows and keeps a evident concentration aloft while channel support. Interim insurgency targets mount during 1.2409 corroborated by a slope connection around ~1.2440.
Interim support is eyed during 1.2346 corroborated by a monthly open during 1.2320– both areas of seductiveness for depletion / long-entries. Near-term bullish cancellation rests with a monthly low-day annulment tighten during 1.2279– a mangle there would advise a broader improvement is still underway and risks a dump towards 1.2230 or even 1.2167.
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Bottom line: Euro has rebounded from BIG weekly support and we’ll preference vanishing debility while above a monthly open. Ultimately a crack above 1.2440s would be indispensable to fuel a subsequent leg higher. Note that near-term movement is still low in overbought domain and we’ll be looking for a pullback to offer re-entry.
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EUR/USD IG Client Positioning
- A outline of IG Client Sentimentshows traders are net-short EURUSD- a ratio stands during -1.52 (49.7% of traders are long) – bullishreading
- Long positions are 13.6% reduce than yesterday and 7.6% reduce from final week
- Short positions are 3.2% aloft than yesterday and 10.9% aloft 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 rise. Traders are serve net-short than yesterday and final week, and a multiple of stream positioning and new changes gives us a stronger EURUSD-bullish contrarian trade bias from a view standpoint.
See how shifts in EUR/USD retail positioning are impacting trend- Learn some-more about sentiment!
Relevant Data Releases
Other Setups in Play
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- Weekly Technical Outlook: Pending U.S. Dollar Trade Setups
- USD/CAD Technical Outlook: Trade Setups for NFP, Canada Jobs
- AUD/JPY Price Analysis: Is a Correction Over?
- AUD/USD Technical Outlook: Price Tests Critical Uptrend Support
– Written by Michael Boutros, Currency Strategist with DailyFX
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