Euro Short-term Technical Outlook: EUR/USD Plunges into October

Article By: ,  Sr. Technical Strategist

Euro Technical Outlook: EUR/USD Short-term Trade Levels

  • Euro plummets more than 1.3% off yearly high / technical resistance- threat for deeper correction
  • EUR/USD three-day decline now approaching initial support hurdles- NFP on tap
  • Resistance 1.1135/40 (key), 1.1192, 1.1228- Support 1.1038/44, 1.10, 1.0980 (key)

The Euro is poised to mark a third consecutive-daily decline with EUR/USD reversing sharply off uptrend resistance. The losses threaten a deeper correction within the broader uptrend and we’re on the lookout for a possible exhaustion low in the days ahead. Battle lines drawn on the Euro short-term technical charts.

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

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

Technical Outlook: In last month’s Euro Short-term Technical Outlook we noted that we were, “on the lookout for an exhaustion low in the days ahead. From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards the lower parallels – losses should be limited to 1.0947 IF the June advance is to remain intact…” EUR/USD had already marked a low at 1.10 the previous day with Euro rallying more than 1.9% into the close September.  

The advance stalled into uptrend resistance for a fourth-day on Monday with the subsequent sell-off accelerating today on the heels of softer-than-expected Eurozone inflation data. The decline was further exacerbated by headlines of an imminent Iranian attack on Israel and the US Dollar has found some footing here. The focus is on this pullback into initial support at the objective yearly open / September open at 1.1038/44- looking for possible inflection off this mark this week.

Euro Price Chart – EUR/USD 240min

 

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

Notes: A closer look at Euro price action shows EUR/USD trading within the confines of a proposed descending pitchfork with the median-line seen just above the 1.1038/44 support zone. A break / close below this threshold would threaten a test of broader uptrend support with initial objectives eyed at the 1.10-handle and the 38.2% retracement of the April advance at 1.0980- look for a larger reaction there IF reached (broader bullish invalidation).

Initial resistance is eyed at the October open / December high at 1.1135/40 with a topside breach / close above the yearly high-close at 1.1192 needed to mark uptrend resumption. Subsequent resistance objectives eyed at the 2023 high-day close (HDC) at 1.1228 and the highlighted Fibonacci confluence at 1.1275/92.

Bottom line: Euro has turned from technical resistance and threatens a larger correction within the broader uptrend. From a trading standpoint, rallies should be limited to the December high IF price is heading lower on this stretch – ultimately, Euro would need to mark an exhaustion low ahead of the 1.0980 for the broader April rally to remain viable. Keep in mind we are just carving the monthly / quarterly opening-ranges here with US non-farm payrolls on tap Friday. Stay nimble into the release and watch the weekly closes for guidance.

Key EUR/USD Economic Data Releases

 

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

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

Follow Michael on Twitter @MBForex

 

 

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.

© FOREX.COM 2024