Euro Short-term Outlook: EUR/USD Bears Battle 1.05

Euro Technical Outlook: EUR/USD Short-term Trade Levels

• Euro threatens break below October uptrend – risk for downside exhaustion / price inflection
• EUR/USD major event risk this week with Fed interest rate decision & NFPs on tap
• Resistance 1.0565, 1.0635, 1.0704- Support 1.0542, 1.0466, 1.0340-1.0405 (key)

Euro is on the defensive into the November open with EUR/USD threatening a break of October uptrend. The battle lines are drawn ahead of today’s Fed interest rate decision with NFPs on tap into the weekly close. These are the updated targets and invalidation levels that matter on the Euro 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 my last Euro Short-term Technical Outlook we noted that EUR/USD had, “rebounded off channel support and is now within striking distance of downtrend resistance. From at trading standpoint, the rally should be capped by 1.0643 IF price is heading lower with a close below 1.0483 needed to mark resumption.” Euro plunged lower in the following days with a decline of nearly 1.3% reversing just ahead of the yearly lows. The subsequent rally completed a proper 100% correction into yearly-open resistance at 1.0687-1.0704 – is the recovery over?

Euro is attempting to break below confluent Fibonacci support today at 1.0542 with the Fed interest rate decision on tap this afternoon. Watch the daily close.

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 shows EUR/USD briefly slipping below the October uptrend (red) ahead of today’s rate decision. A close below this threshold would keep the focus on subsequent support at the yearly low-day close at 1.0467 and more significant pivot zone at 1.0340-1.0405 – a region defined by the 2017 swing low, the 2017 low-day close and the 50% retracement of the late-2022 advance. Look for a larger reaction there IF reached.

Weekly-open resistance is eyed at 1.0565 and is backed by the May low at 1.0635. Ultimately, a breach / daily close above the yearly open at 1.0704 (bearish invalidation) is needed to suggest a more significant trend reversal is underway toward 1.0765 and beyond.

Bottom line: Euro is testing a break below multi-week uptrend support into the start of the month with the Fed interest rate decision and US Non-Farm Payrolls on tap into the close of the week. From a trading standpoint, the focus is on a pivot at this key support zone with the bears vulnerable while above 1.0540. Watch the weekly close here for guidance. Review my latest Euro Weekly Technical Forecast for a closer look at the longer-term EUR/USD trade levels.

Key EUR/USD Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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

Follow Michael on Twitter @MBForex