Euro short-term technical outlook: EUR/USD breakdown underway

Euro technical outlook: EUR/USD short-term trade levels

• Euro plunges amid Fed Chair Powell testimony- threatens downtrend resumption
• EUR/USD March opening-range set- price now approaching range lows
• Resistance 1.0704/24, 1.0802, 1.0842 - support 1.0574, 1.0405/61, 1.0340

Euro plummeted more than 1% off the highs as markets digest the possibility of faster / higher rates. EUR/USD has carved a well-defined monthly opening-range with this decline now testing the March range lows. These are the updated targets and invalidation levels that matter on the EUR/USD short-term technical charts.

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Euro Price Chart – EUR/USD Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Technical Outlook: In last month’s Euro Short-term Technical Outlook we noted that EUR/USD was probing a key pivot zone around 1.07, “with a break / close below this threshold threatening a larger correction within the broader uptrend.” Price broke lower days later with Euro registering a low at 1.0533 before marking an outside-day reversal into the close of February.

The monthly opening-range is now set just below resistance at the yearly open / 38.2% Fibonacci retracement of the February decline at 1.0704/24. Monthly open support rests at with the range lows at 1.0565/74 – looking for a breakout of this range for guidance here.

Euro Price Chart – EUR/USD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Notes: A closer look at Euro price action highlights today’s Fed-induced plunge with EUR/USD now approaching the monthly opening-range lows. A break / close below this threshold would expose key support at the 2017 low-day close / 38.2% retracement of the September advance at 1.0405/61- look for a larger reaction there IF reached.

Initial resistance steady at 1.0704/24 and is backed by the 1.08-handle. Ultimately, a breach / close above the 61.8% retracement at 1.0842 would be needed to suggest a more significant reversal is underway.

Bottom line: Euro has plunged into the March opening-range lows and as of now is poised to mark an outside day reversal off the monthly high- looking for possible price inflection here. From trading standpoint, a good zone to lower protective stops- rallies should be limited by today’s highs IF price is indeed heading lower with the next major zone of support eyed at 1.0405/61. Review my latest Euro weekly technical forecast for a closer look at the longer-term EUR/USD trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on Twitter @MBForex