- August 10, 2018
- Posted by: admin@diversi_@finance
- Category: Forexlive Breaking news
The Euro continues to be under pressure and is trading below the June low of 1.1507. As the market was trading sideways for such a long time, and now moved away from the 1.1507 to 1.1753 range, I suspect the price will keep on trading lower in the weeks ahead in-line with my longer-term view.
Client sentiment is further supporting this bearish view, with 85% of retail traders being net-long the EUR/USD. I use client sentiment as a contrarian indicator as the average retail trader tend to get the market direction wrong, e.g., when the price is in a downward trend, the retail trader will buy and vice versa. They also tend to double up on their positions to try to claw back their losses in desperation.
We also note that 79% of traders are net long the AUDUSD pair, which is another pair that breached its trading range and could be on its way lower. For more on this read: AUD/USD: Aussie Slips Below 0.7310 on Risk-Off Tone
As for the EURUSD, the trend is bearish below the 1.1560 level as explained in this morning’s webinar, and the next support levels and potential targets of bearish traders are the July 2017 low of 1.1312 and June 9, 2017 low of 1.1114.
The break to the June low also triggered an ascending triangle pattern with an objective of 1.1176. The June low is the horizontal support level of the pattern, while a downward slanting trendline via the June and July high completes the pattern.
Check out today’s morning webinar