Euro Technical Forecast: EUR/USD Bears Emerge at Resistance

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro surges nearly 3.2% off monthly low- rally fails into confluent resistance
• EUR/USD threat for deeper pullback within broader uptrend- Core PCE, ECB on tap
• Resistance 1.1365/79, 1.1497-1.1510 (key), 1.1748- Support 1.1164/91, 1.1038/40 (key), 1.09339

A reversal off technical resistance puts Euro on the defensive this week with price off more than 1.1% from the monthly highs. The focus is on this near-term pullback as the EUR/USD bulls search for support within the yearly uptrend. Battle lines drawn on the Euro weekly technical chart heading into June.

Euro Price Chart – EUR/USD Weekly

 

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

Technical Outlook: In my last Euro Technical Forecast we noted that the immediate focus was on the weekly close with respect to the 2024 high close near 1.1191 and that, “A break / close below this threshold would threaten a larger correction towards the 2023 high-week close (HWC) at 1.1108 and the December HWC / 2024 yearly open at 1.1038- both levels of interest for possible downside exhaustion / price inflection IF reached.” Euro broke lower the following week with price registering an intraweek low at 1.1065 before reversing sharply higher.

The advance exhausted into key resistance this week at the yearly high-week close (HWC) / 61.8% retracement of the April decline at 1.1365/79. Note that the 75% parallel converges on this threshold this week and further highlights the technical significance of this region.

Initial weekly support now rests with the monthly low-week close (LWC) / 2024 high-close at 1.1164/91 and is backed once again by the median-line. Key support remains unchanged at 1.1038/40 and a break / close below this pivot zone would be needed to suggest a more significant high is in place / a larger trend reversal is underway. Subsequent support rests with the March HWC at 1.0939 and the 200-day moving average (currently 1.0821).

A break above the weekly highs exposes the March 2020 high / 100% extension at 1.1497-1.1510- a weekly close above this level is needed to mark resumption of the yearly uptrend. Subsequent resistance objectives seen at 78.6% retracement of the 2021 decline at 1.1747 and the 100% extension of the yearly advance at 1.1917.

Bottom line: A rebound off the median-line failed into uptrend resistance this week and threatens a deeper setback here. From a trading standpoint, losses should be limited to 1.1164 IF price is heading higher on this stretch with a close above the 75% parallel / the weekly highs needed to mark resumption of the yearly uptrend.   

Keep in mind we get the release of key U.S. inflation data (Core PCE) into the monthly cross with the European Central Bank (ECB) interest rate decision on tap next week. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest Euro Short-term Outlook for a closer look at the near-term EUR/USD technical trade levels.

Key Euro / US Economic Data Releases

 

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

• Canadian Dollar (USD/CAD)
• Australian Dollar (AUD/USD)
• British Pound (GBP/USD)
• Japanese Yen (USD/JPY)
• Gold (XAU/USD)
• US Dollar Index (DXY)
• S&P 500, Nasdaq, Dow
• Swiss Franc (USD/CHF)

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex