Euro Technical Forecast: EUR/USD Post-ECB Rally Rips into Resistance

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro rebound off key yearly-open support marks second weekly advance
• EUR/USD now approaching initial resistance hurdle – risk for price inflection
• Resistance 1.0919, 1.1033/70 (key), 1.1148– support 1.0667-1.0705, 1.0459/99 (critical), 1.0352

Euro surged this week on the heels of the FOMC / ECB interest rate decisions with a rally of more than 2% off the May lows now approaching the first major resistance hurdle. 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 noted that a multi-week decline in EUR/USD was approaching major technical hurdles and that, “the immediate focus is on possible price inflection into these key support levels just lower.” Euro grinded into support for three weeks before rebounding with the post-FOMC / ECB rally extending more than 1.2% this week.

Initial resistance is eyed just higher towards the 61.8% Fibonacci retracement of the April decline at 1.0919 with key resistance steady at 1.1033/70- a region defined by the January high, the yearly high-week close and the 23.6% retracement of the broader 2088 decline. Ultimately a breach / close above this threshold would be needed to validate a breakout of the yearly opening-range towards 1.1148 and the 61.8% retracement of the 2021 decline at 1.1275.

Key support now shifts to the 2023 low-week close (March) / objective yearly open at 1.0668-1.0705. A close below this zone would threaten a plunge towards a major technical confluence at ~1.0459/99 – a region defined by the 52-week moving average, the January lows and the 38.2% retracement of the 2022 ascent.

Bottom line: Euro has rebounded off technical support around the yearly open with the advance now approaching downtrend resistance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch towards 1.0919- losses should be limited to 1.07 IF price is heading higher with a topside breach needed to fuel another run on the yearly highs. Note that a close below 1.0667 would likely fuel another accelerated decline- use caution there IF reached. I’ll publish an updated Euro Short-term Technical Outlook once we get further clarity on the near-term EUR/USD technical trade levels.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

• Japanese Yen (USD/JPY)
• Australian Dollar (AUD/USD)
• British Pound (GBP/USD)
• US Dollar (DXY)
• Gold (XAU/USD)
• Crude Oil (WTI)
• Canadian Dollar (USD/CAD)
• S&P 500, Nasdaq, Dow Jones

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

Follow Michael on Twitter @MBForex