EURUSD Technical Analysis – 20 to 24 May – Weekly Update – Euro Dollar Outlook
by Nick Simpson, Forex-FX-4X
- The euro/dollar pair experienced an extension of the prevailing downside trend on Friday, moving to a low of 1.2795, before retracing to the two day low area from Wed/Thur around 1.2840 – a longer term price pivot zone.
- Price is now threatening to take out prior support around the 1.2745 area.
- The 61.8% Fibonacci retrace of the longer term swing higher follows as a technical area of interest around 1.2680.
- Large speculators had increased the net short EUR position by over 40% on the weekly basis according to the latest COT report data, to hit $7.6 billion for the specified reporting period and -46,291 versus -33,533 net short contracts.
- This comes as the dollar index has managed to print a weekly close above prior USDX 84.00 area resistance. With the highest weekly close since mid-2010, largely fulled by dollar strength versus the Japanese yen.
- Any corrective move higher for the EURUSD could potentially see an element of resistance around the following areas: the 1.2875 pivot area, the 1.2930 zone (prior support to potential resistance), and the key 1.3000 handle round number area.
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