Euro Technical Forecast: EUR/USD Checks Make-or-Break Support

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro plunges 3.74% off December high– responding to multi-year technical support
• EUR/USD threat for downside exhaustion / price inflection – US CPI, Retail Sales on tap
• Resistance 1.0818/25, 1.0942, 1.1038– Support 1.0704/23 (key), 1.0587, 1.0483

Euro plummeted more than 2.8% since the yearly-open with EUR/USD struggling to snap a three-week losing streak into the close on Friday. A four-day rebound off multi-year technical support now threatens the late-December downtrend, and the focus is on possible price inflection in the weeks ahead. 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 highlighted that Euro was testing support at the 52-week moving average and that a, “break below this week’s low would threaten a larger correction towards key support at the 2023 yearly-open / 61.8% retracement of the October rally at 1.0704/12 (look for a larger reaction there IF reached)- losses should be limited to this pivot zone for the multi-month uptrend to remain viable (bullish invalidation).” Euro broke sharply lower the following week with the decline briefly registering an intraweek low at 1.0722 before mounting a four-day rally. The focus remains on a reaction off this mark with the late-December downtrend vulnerable while above.

Initial weekly resistance is eyed at the objective monthly-open / 52-week moving average around ~1.0818/25 backed by the January high-week close at 1.0942 - rallies should be limited to this threshold IF price is heading lower here. Ultimately, a breach / weekly close above the December high-week close (HWC) / 2024 yearly open at 1.1038 is needed to suggest a larger trend reversal is underway here.

We’ll expand key support to include the December swing lows and the May low-week close at 1.0704/23 – a break / weekly close below this threshold would invalidate the October uptrend and expose subsequent support objectives at the 2023 low-week close (LWC) at 1.0587 and the January lows near 1.0483 (both areas of interest of possible exhaustion / price inflection IF reached).

Bottom line: Euro has plunged more than 3.7% off the December highs with the decline now testing a pivotal support zone around the 2022 trendline- risk for price inflection off this mark. From a trading standpoint, a good zone to reduce portions of short-exposure / raise protective stops- rallies should be limited to 1.0942 IF price is heading lower on this stretch with a close below 1.0704 needed to fuel the next major move. Keep in mind we get the release of key inflation data next week with the US Consumer Price Index (CPI) on tap Tuesday. Review my latest Euro Short-term Technical Outlook for a closer look at the near-term EUR/USD trade levels.

Key Euro / US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

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

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

Follow Michael on X @MBForex