Euro Short-term Outlook: EUR/USD December Range Unfazed by ECB

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

Euro poised to mark fifth daily decline- testing support at monthly range lows
EUR/USD December opening-rang intact post-ECB- breakout imminent
Resistance 1.0587-1.0602, 1.0670/81 (key), 1.0730- Support 1.0446/66 (key), ~1.0305, 1.0200/04

Euro is poised to mark a fifth-consecutive daily decline with EUR/USD trading back into support at the December range lows. The focus remains on a breakout of the monthly opening-range with the bulls still vulnerable while above the 2023 low. Battle lines drawn on the Euro short-term technical charts ahead of next week’s Fed decision.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this EUR/USD technical setup and more. Join live Monday’s at 8:30am EST.

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 the focus was on a, “breakout of the monthly opening-range which is taking shape just below resistance.” The December range is preserved post-ECB with a five-day decline taking Euro into support today around the monthly low. Looking for possible inflection here with the focus still on a range-breakout in the days ahead.

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 continuing to trade within the confines of the ascending pitchfork we’ve been tracking since the start of the month. Note that the lower parallel converges on confluent support over the next few days at 1.0446/66- a region defined by the the 61.8% retracement of the November rally, the December opening-range lows, and the 2023 low-day close (LDC). A break below / close below the lower parallel would threaten downtrend resumption towards key support targets at the 2017 LDC / 50% retracement at 1.0405/06 and the 2017 swing low at 1.0340- both levels of interest for possible downside exhaustion / price inflection IF reached.

Resistance remains with the 2023 low-week close (LWC) / April low at 1.0587-1.0602 and is backed by the 38.2% retracement / June LDC at 1.0670/81- a breach / close above this threshold would be needed to suggest a more significant low was registered last month / a larger reversal is underway. Subsequent resistance objectives eyed at the November high-day close (HDC) at 1.0730 and the August low / October LDC at 1.0778/82.

Bottom line: Euro is testing support at the monthly low with the December opening-range intact heading into the close of the week. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops– rallies should be limited to 1.06 IF price is heading lower on this stretch with a close below 1.0446 needed to fuel the next leg of the decline.

Keep in mind the FOMC interest rate decision is on tap next week- stay nimble into the release and 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.

Active Short-term Technical Charts

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

Follow Michael on Twitter @MBForex

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