EUR/USD braces for impact of hitting key resistance

Just as many other resistances, the monthly pivot point also failed to stop the Euro from going higher. However, EUR/USD is now approaching a key resistance zone between 1.39 and 1.395 that consists of two major multi-year trend-lines. Accordingly, there is a low chance of the currency pair rising above this area and reaching the 2011 highs at 1.42. It is more likely that the rate will soon start negating the gains while targeting the support at 1.37.

A significant majority of the SWFX market participants now consider the Euro to be overvalued—68% of open positions are short and merely 32% of them are long. Meanwhile, the gap between the buy and sell orders narrows, now it is minus 16 percentage points.