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From mid-November 2021 to the middle of January 2022, the Euro broke out of a small congestion range that had held it locked versus the US Dollar for three months. However, immediate follow-through has not occurred, with technical positioning currently providing contradictory clues regarding further developments. 

On the one hand, it seemed significant that the surge was unable to find even two days of momentum after prices had been inactive for so long. One could have assumed that pent-up breakout pressure would have driven the euro higher. It’s also worth noting that the move has paused around a multi-year inflection point near 1.15.

From this vantage point, the rally seems corrective, with a healthy retest near previous support in the mid-1.15 zone before the cycle of lower highs and lows that began in May 2021 is restarted. This scenario might be confirmed with a closure below 1.1355, followed by a break of rising counter-trend support. 

However, it is impossible to overlook the fact that the retreat following the first advance came to a halt squarely on a downward-sloping barrier linking big peaks over the duration of the long-term trend. This might imply that a bullish breakout has already happened and that the retreat is only a corrective move before another push higher.

Buyers look to be in for a long road ahead in this scenario, as a flurry of back-to-back barriers in the shape of past support levels line up to impede advance. Regaining a strong foothold above the 1.17 mark appears to be a must for making a compelling case for a long-term bullish trend reversal. 

The contradictory indications on the technical side are echoed by sentiment data. Retail traders support Euro increases by a razor-thin margin of 54.56 percent. Crowd positioning is normally a contrarian indication, so the net-long setting may reflect a bearish argument, but the split is so close to 50/50 that the signal appears weak for the time being.

Nonetheless, the net-long skew has increased by 3.4 percent over the previous week and 5.2 percent over the previous session. This somewhat strengthens the bearish thesis, implying that a change toward a more Euro-negative stance mismatch may be in the works. However, such reasoning does not appear to be actionable in the absence of other proof.