Euro Technical Forecast: EUR/USD Stalls at Uptrend Resistance

Euro Technical Forecast: EUR/USD Weekly Trade Levels

Euro rally extends to multi-year highs- bulls stall into uptrend resistance
EUR/USD July opening-range taking shape, breakout to offer guidance
Resistance ~1.1830s, 1.1917-1.2020, 1.2227- Support 1.1616, 1.1497 (key), 1.1365

The Euro rally extended to fresh multi-year highs this week with EUR/USD testing uptrend resistance into the July open. While the broader outlook remains constructive, the immediate advance may be vulnerable on this stretch, and we look for the monthly opening-range to offer further guidance on this advance. Battle lines drawn on the Euro weekly technical chart heading into the FOMC.

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Euro Price Chart – EUR/USD Weekly

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

Technical Outlook: In last month’s Euro Technical Forecast we noted that, EUR/USD was testing resistance and that, “losses would need to be limited to 1.1365 IF price is heading higher on this stretch with a close above 1.1616 needed to fuel the next leg of the decline.” Euro broke higher the following week with the advance extending into the upper parallel of a modified pitchfork extending off the 2022 lows- looking for a reaction off this mark.

As we noted in our EUR/USD H2 Forecast, the six-month Euro advance may be vulnerable heading into the start July / Q3 after rallying more than 16% off the yearly lows. That said, weekly momentum remains in the overbought condition with the June breakout extending to fresh three-year highs – risk for near-term exhaustion.

Initial support rests with the 2016 swing high back at 1.1616 and is backed closely by the March 2020 / 2022 highs at 1.1497- losses below this threshold would suggest a more significant high is in place / a larger correction is underway. Subsequent support objectives rest with the April high-week close (HWC) at 1.1365 and the 20214 high-close / May low-week close (LWC) at 1.1163.

A topside breach / close above the upper parallel (currently ~1.1830s) would threaten another accelerated advance towards the next major technical consideration at 1.1917-1.2020- a region defined by the 100% extension of the 2022 advance and the 38.2% retracement of the 2008 decline. Look for a larger reaction there IF reached with subsequent resistance objectives seen at the 2021 HWC at 1.2227 and the 2018 high-close at 1.2456.

Bottom line: The Euro rally has extended into uptrend resistance with the July opening-range taking shape just below- look for the breakout to offer guidance here. From a trading standpoint, pullbacks would need to be limited tot 1.1497 IF price is heading higher on this stretch with a close above the upper parallel needed to fuel the next leg of the advance- watch the weekly closes. Review my latest Euro Short-term Outlook for a closer look at the near-term EUR/USD technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist

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