The EURUSD pair is looking very bearish against the US dollar on the foreign exchange market at the start of the week after the single currency performed its lowest weekly and daily price close in over a year.
As things stand the EURUSD pair looks primed for more heavy losses this week, and with US retail sales expected to outperform this week, the fundamentals also look good for the buck.
Traders should also consider that European Central Bank President Christine Lagarde is also set to speak this week, with most analysts expecting the ECB President Lagarde to repeat the dovish rhetoric from this month’s policy meeting.
Selling rallies back towards the 1.1500 level looks to be a particularly attractive strategy this week, in anticipation of further weakness. It is particularly likely that the 1.1500 resistance zone will be important this week.
In terms of technical resistance, the 1.1500 and 1.1520 levels are the key price zones to watch. These could be ideal sell zone to target much lower levels over the medium-term.
Sentiment is still worryingly high and is confirming the remains on the sell side is probably the best strategy for the EURUSD as fading retail sentiment during trends has proved to be a profitable strategy.
The ActivTrader Market Sentiment tool shows that some 72 percent of traders are bullish towards the EURUSD. This sentiment metric has remained unchanged for over a week now.
EURUSD Short-Term Technical Analysis
The four-hour time frame continues to show that the EURUSD pair has ignited a head and shoulders pattern, which could send the EURUSD pair towards the 1.1350 area.
Upside failure around the 1.1511 level would be ideal this week, meaning that the EURUSD pair has survived buying attempts back towards the neckline of the pattern.
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EURUSD Medium-Term Technical Analysis
Looking at the daily time frame things look very bearish for EURUSD after the pair dropped under the 1.1500 level, meaning that a big range breakout is in play now.
If the EURUSD pair fails to stage a recovery above the 1.1540 area this week then a big drop towards the 1.1150 area could be coming over the medium-term.
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