Euro Technical Forecast: EUR/USD Bears Defend Yearly-Open Resistance

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro rebounds off yearly low- rally faltering today ahead of yearly-open resistance
• EUR/USD recovery vulnerable into ECB, FOMC rate decisions / US inflation
• Resistance 1.0704/65, 1.0850s, 1.0960 – Support 1.0483, 1.0352, 1.0201

Euro attempted to breakout of the October opening-range yesterday only to be thwarted the following day with EUR/USD exhausting just ahead of yearly-open resistance. The broader outlook remains tilted to the downside for the Euro with major event risk on tap over the next two-weeks. These are the updated targets and invalidation levels that matter on the EUR/USD weekly technical chart.

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

Euro Price Chart – EUR/USD Weekly

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

Technical Outlook: In last month’s Euro Technical Forecast, we noted that EUR/USD had, “stretched into the yearly range lows this week and while the risk remains weighted to the downside, the bears may be vulnerable into the Q4 open. From a trading standpoint, rallies should be limited to the 1.08-handle IF price is heading lower on this stretch with a close below 1.0483 needed to mark resumption of the broader downtrend.” Euro briefly registered an intra-week low at 1.0448 into the October open before rebounding more than 2.3 % - the advance carved two-equal legs off the low before faltering today (100% extension at 1.0687). Is a near-term correction off the low complete?

Weekly resistance / near-term bearish invalidation is now lowered to 1.0704/65- a region define by the objective 2023 yearly open, the 52-week moving average, and the 38.2% retracement of the entire yearly range. A breach / weekly close above this threshold would be needed to suggest a more significant low was registered this month and threaten a larger recovery towards former slope support (currently ~1.0850s) and key resistance at the 61.8% Fibonacci retracement at 1.0960.

Monthly open support rests at 1.0571 backed again by the January low at 1.0483- a break / weekly close below this level is needed to mark resumption of the July downtrend towards subsequent support objectives at the 2016 low (1.0352) and the 61.8% retracement of the 2022 advance at 1.0201- look for a larger reaction there IF reached.

Bottom line: A rebound off the yearly lows has completed a corrective rally with the advance faltering today just ahead of a major resistance pivot- looking to validate a near-term high.  From a trading standpoint, rallies should be limited to 1.0765 with a break / close 1.0483 needed to mark downtrend resumption.

Keep in mind the European Central Bank (ECB) rate decision is on tap Thursday and is followed by key inflation data out of the US (and FOMC next week) – stay nimble here and respect the weekly closes.  I’ll publish an updated Euro Short-term Technical Outlook once we get further clarity on the near-term EUR/USD technical trade levels.

Key Euro / US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

• Canadian Dollar (USD/CAD)
• British Pound (GBP/USD)
• Japanese Yen (USD/JPY)
• Australian Dollar (AUD/USD)
• Crude Oil (WTI)
• US Dollar (DXY)
• Gold (XAU/USD)

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

Follow Michael on Twitter @MBForex