Short term technical outlook: trade setups on EUR / USD, AUD / USD and USD / CAD
- Technical charts on the configuration of the exchanges that we followed EUR / USD, AUD/USD &USD / CAD
- euro test of key support near September lows
- Aussie in the critical annual open support area
- USD /GOUJAT dropout – support in 1.32
An update on technical configure us’ve summer monitoring inEuro, Aussie and Loonie. These are targets and invalidation levels that matter as the US presidential elections and key central bank rate decisions approach this week.Review my last Strategy webinar for an in-depth analysis of theseTrade installs and more.
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Euro price table – EUR / USD 120min
In the last week Euro price outlook we underlined, “Key resistance / bearish invalidation remains stable at 1.1853 / 59– a region defined by the extension to 100% of the end of September advance and the 61.8% Fibonacci retracement from the September range.”EUR / USD continued to respect this area closely, with price briefly recording a high at 1.1880 before falling towards the end of October.
Conclusion: This decline is now testing a key support area at October 2018 high / 61.8% extension to 1.16.21 / 33. Initial resistance is now returning to 1.17-handle closely supported by the October opening to 1.1719– the two regions of interest for a possible depletion of the IF surface are reached. Bearish invalidation now lowered to 1.1786. A break lower from here exposes the lower parallel, currently near 1.1580 with a critical confluence support observed 1.1482 / 99.Review my last Weekly price outlook in euros for a long-term view GBP / USD technical commercial levels.
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Euro Trader Sentiment – EUR / USD Price Chart
- A summary of IG customer sentiment shows that traders are net-short EUR / USD – the ratio is -1.04 (49.10% of traders are long) – neutral reading
- Long positions are22.39% more than yesterday and 61.17% more than last week
- Short positions are12.96% more than yesterday and 33.96% less than last week
- We generally take a vexing view of crowd sentiment, and the fact that traders are net-short suggests that EUR / USD prices may continue to rise. However, traders are less net-short than yesterday and compared to last week. Recent changes in feeling warn that the current EUR / USD price trend may soon reverse lower despite traders staying net-short.
of customers are net long.
of customers are net short.
Australian Dollar Price Chart – Daily AUD / USD
In my most recent Australian dollar price technical outlook we noted that the AUD / USD, “slicing through the weekly open range just below the monthly open / downtrend resistance – looks to the breakout as a guide”, with the wider risk of a deeper pullback below the September trendline. Cancellation outside the monthly open day resistance at 7160 last week brings the Aussie back in key support here at 7016/42– looking for an infection outside this threshold as the elections approach with a break / close below necessary to keep the short bias viable as November approaches. Support objectives subsequent to 6963 and the extension 100% to 6835.
Bottom line: Aussie is testing a major support inflection area here with September’s wider bearish trend still in play as it is below 7160. Review my last Australian Weekly Price Outlook for a look at longer term AUD / USD technical trading levels.
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Canadian Dollar Price Chart – USD / CAD 120min
In my last Price Outlook in Canadian Dollars we noted that USD /GOUJAT was approaching, “critical support to 1.3046 / 56. Ultimately, we are looking to base this week with a breach above that formation needed to move attention again higher in the US dollar. The decline never reached that level, with USD / CAD clearing the 78.6% retracement at 1.3085 in late October trade. The recovery failed last week at confluence resistance to 1.3375 / 82 and the emphasis is on this downturn as we approach a risk-heavy week.
At the end of the line Support lies at the lower parallel / 61.8% retracement at 1.3199– look for a reaction there IF hit with a fence below 1.3156 / 62 necessary to mark the resumption of the broader downtrend. Resistance open weekly to 1.3313 with a higher breach keeping the focus on 1.3450. Review my last Canadian dollar weekly price outlook for a more in-depth look at longer term USD / CAD technical trading levels.
For a full description of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuilding a Tradiant Sstrategy
-Written by Michael boutros, Currency strategist with DailyFX
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