EURUSD weekly technical outlook: limit orders. With Draghi’s insistence on the prolonged policy stance and perhaps Marine Le Pen becoming the next France president, we can only wish EURO bulls well.
09 April, AtoZForex –This past week saw the EURUSD hitting a fresh multi-week low. The week ended with the pair diving and closing below its 100-Day moving average. Geopolitical developments have provided for limited support, with a short-lived pop in response to the U.S. missile strikes on Syria. Fundamentals have dominated mostly as market participants have looked beyond stronger German industrial production and trade to focus on the weaker industrial production figures out of France and Spain.
The figures stand in contrast to the stronger PMI’s, calling into question the growth narrative that had fostered the recent (EUR-supportive) wobbles in ECB messaging. Draghi’s forceful defense of the current policy stance has confirmed the outlook for policy divergence relative to a tightening Fed.
EUR’s bearish bias should be maintained on the basis of relative central bank policy, also with a focus on the upcoming French election. The continuous terrorist attacks in Europe are making investors nervous about Marine Le Pen's chances of becoming the next President of France. She’s a full advocate of anti-immigration, anti-terrorism and going by the latest polls results, she’s virtually neck to neck with Emmanuel Macron going into the first round of voting on April 23rd.
EURUSD weekly technical outlook: limit orders
Looking at the daily technical posture of the EURUSD, bulls hope looks quite bleaky. With Draghi’s insistence on the prolonged policy stance. And perhaps Marine Le Pen becoming the next France president, we can only wish EURO bulls well. After bottoming out at the beginning of the year with the low of 1.0339, EURUSD printed a first quarter high of 1.0905. This was a significant region as it’s a confluence of its 200-Day moving average. Also, a trendline connector from May to August (2016) high.
A question which, however, begs for an answer is perhaps if the EURO has indeed bottomed out or a potential new low is in the offing. The technical posture is, however, worrisome as combos of price action and chart patterns suggest we could be headed for a fresh low. A potential M formation seems to be unveiling on the daily frame. The equality handle of this M formation is located at 1.0380 region. If this is correct, then it’s a matter of time before the EURUSD makes it to the bottom of its daily range.
Going into the new trading week which could be a slow one ahead of the Easter Holidays, our focus is to sell the rallies.
Verdict; Sell limit order should be placed around 1.0640 with SL at 1.0740. Our first TP should be 1.0500. A break of 1.0500 should lead us to the equality target of the M formation at 1.0310. However, limit orders should be deleted by Wednesday close if a fill doesn't happen.
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