Euro Technical Forecast: EUR/USD Range Breakout in Focus Ahead of Fed Decision
Euro is testing the top of its recent range with the Fed on deck. Pressure builds for a decisive break to set the tone into year-end.
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Euro Technical Forecast: EUR/USD Weekly Trade Levels
- Euro rallies more than 1.8% off November lows- pressing into the upper bounds of a well-defined multi-week range
- EUR/USD range-breakout to set the tone into the close of the year- Fed on tap
- Resistance 1.1641, 1.1679 (key), 1.1747/75- Support 1.1497-1.15 (key), 1.1394, 1.1228/54
Euro is trading into the upper bounds of a well-defined multi-week range as EUR/USD extends into resistance ahead of Wednesday’s FOMC rate decision. The December opening-range has taken shape, and the breakout from this key zone will be critical in determining the next directional move in the pair. While the broader structure remains constructive, the immediate focus is on a resolution of this compression pattern for guidance into the close of the year. Battle lines drawn on the Euro weekly technical chart heading into the Fed.
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, Sr. Technical Strategist; EUR/USD on TradingView
Technical Outlook: In last month’s Euro Technical Forecast we noted that EUR/USD had, “rebounded off uptrend support with the recovery now testing initial resistance- watch the weekly close with respect to 1.1641.” Euro rebounded nearly 1.9% off those lows with price registering a weekly close at the 38.2% retracement of the September decline at 1.1641 on Friday. The focus now shifts to the FOMC rate decision on Wednesday, and the focus is on breakout of this multi-week range just above support.
Note that the 100% extension of the November rally is eyed at 1679 and a weekly close above this level would nullify the threat this advance being a near-term correction and shift the focus back towards key resistance at 1.1747/78. This region is defined by the 2025 high-week close (HWC), the 61.8% retracement of the September decline, and the 2025 high-close. And advance beyond this threshold would threaten another test of the yearly highs with subsequent resistance eyed at the 100% extension of the 2022 advance at 1.1917 and the 38.2% retracement of the broader 2008 decline at 1.2019.
Weekly support remains unchanged at 1.1497-1.1505- a region defined by the March 2020 high, the 2022 swing high, and the 78.6% retracement of the July advance. A break / weekly close below this threshold would be needed to suggest a more significant high is in place, and a larger trend reversal is underway. Subsequent support objectives eyed at the April high-close at 1.1394 and the 2024 HWC / 38.2% retracement of the yearly range at 1.1228/54- look for a larger reaction there IF reached.
Bottom line: Euro is trading in a well-defined range with EUR/USD trading into the upper bounds this week ahead of major event risk. Look for the breakout to offer guidance into the close of the year. From a trading standpoint, the immediate focus is on a breakout of the embedded December opening-range- losses would need to be limited to the 1.1589 IF price is heading higher on this stretch with a close above 1.1679 needed to fuel the next leg of the rally.
Keep in mind we get the release of the FOMC interest rate decision on Wednesday. The focus will be on the Fed’s updated Summary of Economic Projections, and the interest rate dot-plot will be critical as investors adjust the outlook for monetary policy heading into 2026. As of now, Fed Fund Futures are nearly fully priced for a cut this week (87%) with the next rate cut expected in April. Stay nimble into the release 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.
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--- Written by Michael Boutros, Senior Technical Strategist
Follow Michael on X @MBForex
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