Forexrobots24

forex advisor developer

EUR/USD Technical Analysis: Euro Rebound May Soon Fizzle

EUR/USD TECHNICAL ANALYSIS: BEARISH

  • Euro bounces vs US Dollar but gains appear to be corrective
  • Four-hour chart reveals prices capped by monthly downtrend
  • Trader sentiment studies point to firming bearish trend bias

The Euro has launched a tepid recovery against the US Dollar, as expected. Prices pulled up from support at 1.0652, the 78.6% Fibonacci expansion, to challenge former support in the 1.0783-1.0880 zone. This barrier is reinforced by the 61.8% level at 1.0832.

Euro vs US Dollar price chart - daily

EUR/USD daily chart created with TradingView

Thus far, the rally appears to be corrective within the context of a broader descent. Indeed, zooming into the four-hour chart reveals EUR/USD remains conspicuously capped by falling trend line resistance defining the descent since the beginning of the month.

Neutralizing near-term selling pressure probably demands a convincing break above this barrier. In this scenario, prices may open the door for a move to challenge support-turned-resistance just below the 1.10 figure. Alternatively, slipping below countertrend support may clear the way back below 1.07.

Euro vs US Dollar price chart - 4 hour

EUR/USD 4-hour chart created with TradingView

Building Confidence in Trading

Building Confidence in Trading

Recommended by Ilya Spivak

Building Confidence in Trading

Get My Guide

EUR/USD TRADER SENTIMENT

Euro vs US Dollar price, trader sentiment

Retail positioning data shows 57.28% of traders are net-long, with the long-to-short ratio at 1.34 to 1. IG Client Sentiment (IGCS) is typically used as a contrarian indicator, so the net-long skew in tradersexposure suggests that EUR/USD is likely to trend downward.

Furthermore, the number of traders net-long is 21.89% higher than yesterday and 33.98% higher from last week.The net-short tally is 6.53% lower than the prior session and 11.26% from a week before. Taken together, recent changes in positioning make for a stronger sentiment-derived bearish signal.

See the full IGCS sentiment report here.

How to Use IG Client Sentiment in Your Trading

How to Use IG Client Sentiment in Your Trading

Recommended by Ilya Spivak

Improve your trading with IG Client Sentiment Data

Get My Guide

EUR/USD TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter