2025 EUR/USD Technical Outlook Preview

Euro Price Chart – EUR/USD Monthly

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

Euro continues to trade within the confines of an ascending pitchfork formation extending off the 2022 low with the April advance faltering just ahead of resistance at 1.1275 into the close of Q2. The subsequent reversal was poised to close a third-consecutive monthly loss as of late December with EUR/USD attempting to mark a close below support around the 2015 low at 1.0463- looking for clear inflection off this mark into the yearly cross.

Note that monthly momentum readings have reached the lowest levels in over a year and an RSI reading sub-forty into the close would suggest a larger shift in the momentum profile favoring the bears. Critical support rests with Parity while key resistance (bearish invalidation) for the broader downtrend is eyed with the 2020 low-month close (LMC) / the objective 2024 yearly open at 1.1032/38.

Euro Price Chart – EUR/USD Weekly

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

A closer look at the weekly chart shows the November rebound off the lower parallel of a descending pitchfork we have been tracking off the September highs. Initial weekly support rests with the 2016 swing low at 1.0352. Ultimately, a break below the lower parallel would threaten the next major leg of the decline towards the 61.8% retracement of the 2022 advance at 1.02 and parity- both levels of interest for possible downside exhaustion / price inflection IF reached.

Weekly resistance stands with the November high-week close (HWC) / February low-week close (LWC) at 1.0719/77- a breach / close above this threshold would be needed to suggest a more significant low is in place / a larger trend reversal is underway. Subsequent resistance eyed at the March HWC a 1.0939 and the December HWC / 2024 yearly open at 1.1038- both levels of interest for possible topside exhaustion / price inflection IF reached.

Bottom Line: Euro remains vulnerable to further losses heading into the 2025 open and the focus is on an exhaustion low in the first half of the year. From a trading standpoint, the threat remains weighted to the downside while below 1.0777 – look for a larger reaction on stretch towards the lower parallel for guidance with a closer below 1.02 needed to fuel the next major leg of the decline. The onus is on the bulls to try to secure a low ahead of parity IF the 2022 advance is to remain viable in the coming year. The EUR/USD battle lines are drawn heading into 2025.

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

Follow Michael on X @MBForex