Euro Short-term Technical Outlook: EUR/USD Breakout Eyes 2024 High

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

• Euro breakout extends 2.5% off monthly low- now testing major resistance hurdle at yearly highs
• EUR/USD risk for exhaustion / price inflection– momentum to offer guidance
• Resistance 1.1038/60 (key), 1.1105, 1.1140- Support 1.10, 1.0933/48, 1.0916 (key)

The Euro breakout has extended into the first major resistance hurdle at the 2024 yearly highs. Although the broader focus remains constructive, we’re looking for possible inflection into this pivot zone with the immediate advance vulnerable while below. These are the updated targets and invalidation levels that matter on the Euro short-term technical charts.

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

Technical Outlook: In last week’s EUR/USD Short-term Technical Outlook we noted that Euro was, “threatening a major breakout at key resistance early in the month and the immediate focus is on possible pivot off this zone… From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 1.0797 IF price is heading higher on this stretch with a close above the median-line needed to fuel the next major leg.”

A decline of more than 1.1% off the highs briefly register an intraday low at 1.0881 two-days later before rebounding with the subsequent rally breaching the median-line yesterday. The breakout takes EUR/USD into the first major resistance hurdle at 1.1038/60- a region defined by the objective 2024 open, the yearly high, and the December high-day close (HDC). Looking for a reaction here this week with the immediate advance vulnerable while below.

Euro Price Chart – EUR/USD Daily with RSI

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

It's worth noting that daily RSI is poised to breach 70 for the first time since November (failed attempt) and IF momentum can mark a proper close above, the topside could accelerate even further. The November example shows how this can get very interesting here- that instance saw a nearly 2.6% drawdown before rebounding. Watch the daily closes over the next few sessions.

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 formation we’ve been tracking for months now. Note that the sliding parallel extending off the July high now converges on lateral resistance and further highlights the 1.1038/60 resistance threshold.

Initial support now rests at the 1.10-handle followed by former resistance at 1.0933/48- a region defined by the 61.8% Fibonacci retracement of the December decline and the March high-close. Ultimately, the trade remains constructive while above the objective weekly open at 1.0916- a close below this threshold would be needed to suggest a more significant high was registered this week.

A topside breach / close above this key pivot zone is needed to mark uptrend resumption with subsequent resistance objectives eyed at the December high-close at 1.1105 and the December swing high at 1.1140. Look for a larger reaction there IF reached.

Bottom line: Euro is testing a major pivot zone here and we’re looking for possible price inflection over the next few days. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – pullbacks should be limited to the median-line IF price is heading higher on this stretch with a close above 1.1060 needed to keep the bulls in control towards the December highs. 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

• British Pound Short-term Outlook: GBP/USD Rips to Resistance
• Gold Short-term Technical Outlook: XAU/USD Rally Runs to Resistance
• Canadian Dollar Short-term Outlook: USD/CAD Reversal at Key Support
• US Dollar Short-term Technical Outlook: USD Bulls Emerge
• Australian Dollar Short-term Outlook: AUD/USD Defends 2024 Low

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

Follow Michael on Twitter @MBForex