EUR/USD Fails Test of Resistance

Frankfurt (Mar 6)  EUR/USD reached a high of 1.0640 in today’s trading, testing the highs established early in last week’s trading, but has since sold off and is currently at 1.0582, down 0.37% from last week’s close.

The failed test of resistance has taken place prior to the pair reaching an overbought level, a sign of internal weakness that suggests further selling is likely over the near term.

First support is at the mid-point of Friday’s long green candle, at roughly 1.0560. On a drop below this level, the next support to watch is at 1.0495, which represents last week’s low and a test of the low established on February 22 at 1.0494.

A decline below this support would resume the downtrend dating from the February peak, leaving the next support at the spike low established January 11 at 1.0454. Such a move would also confirm a break of the 61.8% retracement of the early January corrective bottom to the early February peak, a development that would call for an eventual complete retracement with a decline to test the January 3rd low at 1.0340.

Today’s price action has taken place following the release of Eurozone Retail PMI, which came in at 49.9, following a reading of 50.1 and Sentix Investor Confidence, which was reported at 20.7, better than consensus forecast for a reading at 18.5 and a prior reading at 17.4.

 

Later in today’s trading in the US, Factory Orders will be released at 10:00 ET.

According to the latest Commitment of Traders report, released by the Commodity Futures Trading Commission last Friday, with data as of the February 28 close, large speculators increased long positioning in Euro futures by 12,603 contracts and increased short positioning by 5,516 contracts. The total net short position stands at 51,164 contracts, down from 58,251 contracts reported the prior week. Commercials, or large hedgers, however, increased short positioning by 6,445 contracts and increased long positioning by just 720 contracts, bringing their total net long position down to 58,524 contracts.

Source: EconomicCalendar