In this series, we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Euro has rallied more than 2% against the US Dollar since the monthly/yearly lows registered last week with the advance now targeting the first test of resistance. Here are the key targets & invalidation levels that matter on the EUR/USD weekly chart.
EUR/USD WEEKLY PRICE CHART
Notes: In my previous EUR/USD Weekly Technical Perspective we stated that we were looking for exhaustion into the 1.13-handle where the November 2016 swing high converges on the 200-week moving average. Price registered an intra-week low at 1.1215 on building divergence before recovering sharply into the close of the week. Note that a weekly close below 1.13 was never resisted and as such, keeps our focus in price higher while above this threshold.
Initial resistance is eyed at the sliding parallel (red) extending off the January 2017 highs around ~1.1470sbacked by the September outside weekly-reversal close at 1.1603. Ultimately a breach above channel resistance / 38.2% retracement at 1.1228 would be needed to mark the resumption of the broader uptrend.
Bottom line: Euro has responded to long-term support and keeps the focus weighted to the topside while above 1.13. From a trading standpoint, I’ll favor fading weakness targeting a breach of the parallel with such a scenario targeting 1.1603 and beyond. I’ll publish an updated EUR/USD Scalp Report once we get further clarity on near-term price action.
EUR/USD TRADER SENTIMENT
