FxWirePro: Euro bears still in charge

Euro likely to remain under selling pressure,

• The EUR/USD exchange rate is retreating lower after a successful test of the down-trending line that has been in place since mid-March this year. The trend line has already successfully halted EUR/USD advance thrice and this time around too, it showing prominence.
• Nevertheless, this downtrend line is a short-term one and can break relatively easily under buying pressure on positive news. A stronger downtrend line awaits EUR/USD around 1.13 area, which has halted EUR/USD advance since the beginning of the year.
• The euro is currently trading at 1.12 against the USD.

Unless these down trending lines aren’t cleared, sellers would remain in charge in EUR/USD. The retail sentiment also supports the hypothesis.

Retail sentiment:

• The sentiment reports from IG Markets, which is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting, points to bearish bias in the EUR/USD.
• IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used as a contrarian indicator since retail positioning moves in the opposite direction to market movements.
• As of today, according to data from IG markets, 59 percent of the retail positions are on the buy side in EUR/USD, while 41 percent are bearish. That gives the pair a bearish bias.