(MENAFN- DailyFX) EUR/USD stalls at confluence support- downside bias vulnerable while above 1.1709 Check out our 2018 Euro projections in our Join Michael for Live Weekly Strategy Webinars on Euro has plummeted more than 6% off the yearly highs with the decline now testing an area of confluent support which could offer a near-term reprieve to the recent sell-off. That said, the focus is on a break of the 1.1709-1.1827 range for guidance with the broader downside bias at risk near-term.
EUR/USD Daily Price Chart Technical Outlook: In last week's we noted that, 'The immediate EUR/USD decline is at risk as price was, 'approaching confluence support around 1.1709/45 where the 38.2% retracement of the late-2016 advance converges on a extending of the November low. Price registered a low yesterday at 1.1717 before rebounding higher on building momentum divergence and highlights the near-term threat for a larger recovery.
Initial resistance is eyed at 1.1827 and a daily close above this threshold (with and recovery above 30) would suggest a more significant low may be in place. A break lower from here invalidates the reversal play with such a scenario targeting the 2016 high at 1.1616 backed closely by .
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EUR/USD 240min Price Chart Notes: A closer look at Euro price action sees the pair trading within the confines of descending pitchfork formation with price rebounding off parallel support extending off the 5/8 low (red). Note that the drop into 1.1753 achieves the broader measured objective of the February April consolidation break and IF price is going to rebound, this would be a good spot.
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Bottom line: Euro is testing the confluence of near-term down-trend AND longer-term uptrend support here and we're on the lookout for downside while above 1.1709. A breach above 1.1827 targets 1.1897 backed by the 50-line (~1.1950s) and the upper parallel / yearly open at 1.2005.
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EUR/USD IG Client Positioning A summary of shows traders are net-long EURUSD- the ratio stands at +1.2 (54.5% of traders are long) weak bearishreading Retail has remained net-long since April 30th; price has moved 2.8% lower since then Long positions are 3.1% higher than yesterday and 3.6% higher from last week Short positions are 2.4% lower than yesterday and 12.5% lower from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EURUSD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger EURUSD-bearish contrarian trading bias from a sentiment standpoint. See how shifts in EUR/USD retail positioning are impacting trend-
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