Recent Euro Respite May be Short-lived
EUR/USD Price AnalysisEUR/USD fundaments favour dollar post-festive period. Technical patterns present in both weekly and daily charts.IGCS points to short-term uncertainty.EUR/USD FUNDAMENTAL BACKDROPThe Euro has managed to halt losses against the U.S. dollar over the festive period which is somewhat expected as the greenback historically tends to wane with U.S. companies redeploying funds offshore. From a central bank point of view, the divergence between the Fed and ECB is clear with the U.S. adopting a far more hawkish approach relative to the ECB. This should come into effect in 2022 giving added impetus to the EUR/USD downtrend. EUR/USD TECHNICAL ANALYSISEUR/USD WEEKLY CHART:Chart prepared by Warren Venketas, IGWeekly price action on EUR/USD shows the continuation of the long-term symmetrical triangle (black) with bias to the downside despite an oversold Relative Strength Index (RSI) reading. Further upside is on the cards but should prices reach the 1.1500 psychological level, sellers could re-enter the market extending the overall downtrend. EUR/USD DAILY CHART:Chart prepared by Warren Venketas, IGThe short-term frame daily chart paints a similar picture with candlesticks forming a pattern similar to that of an ascending triangle (yellow). This pattern generally presents itself as a bullish continuation pattern but in this case the preceding trend is downward however, an upside breakout is possible with 1.1400 and 1.1500 serving as resistance targets. A break below triangle support will then bring into consideration the November swing low at 1.1186.Resistance levels:Support levels:Triangle support (yellow)1.1186IG CLIENT SENTIMENT DATA FAVORS NEITHER BULLS NOR BEARSIGCS shows retail traders are currently long on EUR/USD, with 60% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment however, because the daily change in long positions (-8%) fell in excess relative to short positions (2.8%), the resultant signal remains mixed which is consistent with the technical analysis outlined above.Contact and follow Warren on Twitter: @WVenketas
element inside the element. This is probably not what you meant to do!