Euro Technical Forecast: EUR/USD Bulls Charge Resistance

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro marks V-shaped monthly recovery– breaches December opening-range highs
• EUR/USD attempting breakout– now testing resistance near November highs
• Resistance 1.0960, 1.1108, 1.1228/75– Support ~1.0806, 1.0665-1.0704, 1.0587

Euro surged more than 2.6% off the monthly lows with EUR/USD back at a key resistance pivot near the November highs. While a breakout of monthly opening-range does keep the trade constructive, the immediate focus is on possible price inflection here with a weekly close above needed to keep the bulls in control. These are the updated targets and invalidation levels that matter on the EUR/USD weekly technical chart.

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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 Euro had, “stretched into Fibonacci resistance and while the pivot above the yearly-open does keep the focus higher, the immediate advance may be vulnerable while below this threshold.” An outside weekly-reversal the following week plunged nearly 2.7% off the highs before turning just ahead of the yearly-open. EUR/USD is has now rallied back into this resistance zone and the focus is on a possible breakout into the weekly close.

Resistance remains unchanged at the 61.8% Fibonacci retracement of the yearly range at 1.0960 – a breach / weekly close above this threshold is needed to keep the long-bias viable towards the 2023 high-week close at 1.1108. Key resistance is eyed at the yearly high / 61.8% retracement of the 2021 decline at 1.1228/75- look for a larger reaction there IF reached.

Initial weekly support remains with the 52-week moving average (currently ~1.0806) backed by a key confluent zone at the 61.8% retracement of the October rally / 2023 yearly open at 1.0665/-1.0704. Broader bullish invalidation now raised to the yearly low-week close at 1.0587.

Bottom line: Euro is testing resistance for a fourth week and we’re looking for possible price inflection up here. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards the upper parallels- losses should be limited 1.0665 IF price is heading higher on this stretch. Keep in mind we get the release of key US inflation data on Friday- watch the close. I’ll publish an updated Euro Short-term Technical Outlook once we get further clarity on the near-term EUR/USD technical trade levels.

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

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