Euro Technical Forecast: EUR/USD Plunge Exposes Multi-Month Support

Euro Technical Forecast: EUR/USD Weekly Trade Levels

Euro turns form key resistance around the yearly opening-range highs
EUR/USD plunge now approaching September uptrend- risk for price inflection
Resistance 1.1033/70, 1.1148, 1.1275– support 1.0793, 1.0705/37 (key), 1.0645

Euro plunged more than 2.5% off the yearly highs after turning from key resistance around the yearly opening-range highs. The sell-off is now approaching multi-month trend support and the threat for possible exhaustion / price inflection into these levels rises in the days ahead. 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 the EUR/USD had, “extended into key resistance around the January highs with the advance still vulnerable while below 1.1033/70. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- be on the lookout for a possible test of slope support heading into the start of the month…” Euro held this resistance zone for nearly five weeks before turning lower with the decline now approaching the September slope support.

Two key levels of significance are eyed at the January high-week reversal-close at 1.0793 and 1.0705/37- a region defined by the objective yearly open and the 61.8% Fibonacci retracement of the yearly range. Both these levels represent areas of interest for possible downside exhaustion IF reached. A break / weekly close below is ultimately needed to suggest a larger trend reversal is underway towards the low-week close at 1.0645 and beyond.

Monthly-open resistance is eyed a 1.1016 with a breach / close above 1.1033/70 needed to mark resumption of the September uptrend towards 1.1148 and the 61.8% retracement of the 2021 decline at 1.1275- look for a larger reaction there IF reached.

Bottom line: A turn from the key resistance near the yearly opening-range highs takes EUR/USD back towards multi-month uptrend support. From at trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – the immediate focus is on possible price inflection into these key support levels just lower. 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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