(MENAFN - DailyFX) EUR/USDbreakout risks near-term pullback – constructive while above 1.1265 Check out our 2019 projections in ourFree DailyFX EuroTrading Forecasts Join Michael for Live Weekly Strategy Webinars onMondays at 12:30GMT Euro has rallied nearly 2% against theUS Dollarwith the move fueling a breakout of multi-month channel resistance. These are the updated targets and invalidation levels that matter on theEUR / USDcharts.Review this week's Strategy Webinarfor an in-depth breakdown of this setup and more.
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EUR/USD Price Chart - Daily
Technical Outlook: In my latestEuro Price Outlookwe noted that the, 'immediate Euro price advance may be vulnerable while below 1.1317' Price is straddling this level now after breaking above January channel resistance last week and while the broader focus remains weighted to the topside, the possibility of near-term price exhaustion remains.
Initial daily support rests at 1.13 backed by near-term bullish invalidation at 1.1265- weakness beyond this threshold would expose a larger correction with broader key support steady at the yearly low-day close / 61.8%retracementat 1.1182/86. Topside resistance objectives remain at 1.1374 and the 61.8% retracement of the 2019 trading range at 1.1394.
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EUR/USD Price Chart - 120minNotes: A closer look at price action shows Euro trading within the confines of an ascendingpitchfork formationextending off the May lows with price trading just below the median-line since the start of the week. The outlook remains constructive while within this formation- the lower parallel comes in around 1.1270s. Ultimately a break below 1.1256/65 would be needed to validate a larger reversal inEUR/USD . Topside resistance objectives are eyed at 1.1374 and 1.1393- a breach there is needed to fuel the next leg higher with such a scenario targeting the 2019 yearly open at 1.1445 (look for a bigger reaction there IF reached).
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Bottom line: Euro broke above multi-month channel resistance last week and keeps the broader focus higher heading deeper into June trade. From at trading standpoint, we're looking for a pullback here to offer more favorable long-entries while within this formation, ultimately targeting a topside breach. Review my lastEuro Weekly Price Outlookfor a longer-term technical picture on EUR/USD.
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EUR/USD Trader Sentiment A summary ofIG Client Sentimentshows traders are net-short EUR/USD - the ratio stands at -1.31 (43.3% of traders are long) – weak bullish reading Long positions are 4.7% higher than yesterday and 3.2% higher from last week Short positions are 6.6% higher than yesterday and 12.2% higher from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Euro prices may continue to rise. Traders are further net-short than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger EUR/USD-bullish contrarian trading bias from a sentiment standpoint. See how shifts in EUR/USD retail positioning are impacting trend-Learn more about sentiment!
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Active Trade Setups Gold Price Outlook: XAU Plummets from Yearly Highs- Bulls Eye Support New Zealand Dollar Price Outlook: Kiwi Fails Flight into Resistance Aussie Price Outlook: Australian Dollar Breakout Vulnerable into RBA - Written byMichael Boutros , Currency Strategist with DailyFX
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