Euro Technical Outlook: EUR/USD Short-term Trade Levels
- Euro set to experience its fifth consecutive daily decline as it tests support at the monthly range lows.
- EUR/USD maintains the December opening-range following the ECB meeting, signaling a potential breakout.
- Key resistance levels identified at 1.0587-1.0602, 1.0670/81 (critical), and 1.0730 while significant support rests at 1.0446/66 (critical), ~1.0305, and 1.0200/04.
The Euro continues to face downward pressure with EUR/USD returning to support levels at the December range lows. The primary focus is on a potential breakout from this month’s opening-range, as bullish sentiment remains precarious above the 2023 low. Key technical levels are being tested as traders brace for the upcoming Fed decision next week.
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Euro Price Chart – EUR/USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Technical Outlook: The prior Euro short-term technical outlook highlighted the imminent breakout from the monthly opening-range formed just below key resistance levels. The December range remains intact following the ECB meeting, with the current five-day decline leading the Euro towards vital support around the monthly lows. Attention is drawn to potential price inflection points as forecasts lean towards a range breakout in the forthcoming days.
Euro Price Chart – EUR/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Notes: A detailed examination of recent Euro price action confirms that EUR/USD continues to trade within the ascending pitchfork pattern detected since the month's beginning. The lower parallel is approaching key support levels of 1.0446/66, defined by the 61.8% Fibonacci retracement of the November rally, the December opening-range lows, and the 2023 low-day close (LDC). A decisive break or close below this lower parallel could prompt a trend resumption towards essential support near the 2017 LDC / 50% retracement at 1.0405/06 and the 2017 swing low at 1.0340, both of which could signify potential exhaustion or price inflection if reached.
Resistance is observed around the 2023 low-week close (LWC) / April low at 1.0587-1.0602, backed by the 38.2% retracement / June LDC at 1.0670/81. A breach or close above this resistance would suggest a significant low might have formed last month, indicating a larger reversal is in progress. Additional resistance targets are identified at the November high-day close (HDC) at 1.0730 and the August low / October LDC at 1.0778/82.
Bottom line: The Euro is currently testing support at the monthly low with the December opening-range intact as the week concludes. This marks an opportune moment to consider reducing short positions or adjusting protective stops, with potential rallies expected to be capped around 1.06 if the bearish trend continues. A close below 1.0446 is necessary to catalyze further declines.
As the FOMC interest rate decision approaches next week, it is crucial to remain agile in response to the upcoming release. Pay close attention to the weekly close for directional guidance. For a deeper insight into the long-term EUR/USD trade levels, refer to the latest Euro Weekly Technical Forecast.
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Analysis by Michael Boutros, Sr Technical Strategist with FOREX.com
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