Euro Technical Forecast: EUR/USD Bulls Rejected at Resistance

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro rally extends 2.15% off monthly low- falters at key technical confluence
• EUR/USD August opening-range breakout in focus- US CPI on tap next week
• Resistance 1.0933/42 (key), 1.1038, 1.1108– Support 1.0797-1.0801 (key), 1.0641/77, 1.0587/96

Euro closed the week just 0.09% higher despite a weekly range of nearly 1.2% with EUR/USD failing to secure the early-week advance. A failed attempt to breach key resistance leaves the advance vulnerable near-term and the focus now shifts to a breakout of the August opening-range for guidance. 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, Sr. Technical Strategist; EUR/USD on TradingView

Technical Outlook: In last month’s Euro Technical Forecast we noted that EUR/USD had plunged into, “the first major test of support and we’re looking for a reaction down here into the August open.” The region in focus was at, “1.0774-1.0801- a zone defined by the 61.8% retracement of the June rally, the 52-week moving average, and the June high-week reversal close.” Price registered an intraweek low at 1.0777 that week before reversing sharply higher into the August open.

The rally failed to make a weekly close above key resistance on Friday at 1.0933/42- a region define by the 61.8% Fibonacci retracement of the December decline, the March high-week close (HWC), and the 2024 HWC (January). A weekly close above this threshold is needed to suggest a more significant breakout is underway with subsequent resistance objective eyed at the December HWC / yearly open at 1.1038 and the 2023 HWC at 1.1108- look for a larger reaction there IF reached.

Critical support now rests at 1.0797-1.0801 (61.8% retracement / 52-WMA)- a break / weekly close below this level would shift the focus back towards multi-month consolidation support (currently ~1.07). Key lateral support unchanged at the yearly low-week close / low close at 1.0641/77 with a close blow 1.0587/96 needed to mark resumption of the broader multi-year downtrend in EUR/USD.

Bottom line: EUR/USD failed to close above a key resistance hurdle this week and leaves the immediate advance vulnerable near-term while below. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 1.08 IF price is heading for a breakout on this stretch with a close above 1.0942 needed to fuel the next leg in price.

Keep in mind that the monthly opening-range is now set just below resistance with key US inflation data on tap next week. Stay nimble into the release and watch the weekly close here for guidance. Review my latest Euro Short-term Outlook for a closer look at the near-term EUR/USD technical trade levels.

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

Follow Michael on X @MBForex