Euro Technical Forecast: EUR/USD Rally Stalls Ahead of Fed

Euro Technical Forecast: EUR/USD Weekly Trade Levels

Euro rally extends to multi-year highs- bulls stall into uptrend resistance
EUR/USD threat for further exhaustion within broader uptrend- Fed rate decision on tap
Resistance 1.1616 (key), 1.1748, 1.1917- Support 1.1365 (key), 1.1164/94, 1.1038/76

The Euro rally exhausted into uptrend resistance this week at fresh multi-year highs with EUR/USD threatening to snap a two-week winning streak. The focus now shifts to the Federal Reserve interest rate decision later today with monthly rally vulnerable while below the 1.16-handle. Battle lines drawn on the Euro weekly technical chart heading into the FOMC.

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, “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.” Euro briefly registered an intraweek low at 1.1210 the following day before marking an outside-day reversal. The subsequent rally extended more than 5.1% off the May lows with price exhausting into resistance this week at the 2016 high near 1.1616. The advance has been marred by ongoing momentum divergence and while the broader outlook remains constructive, the rally may be vulnerable here while below uptrend resistance.

The immediate focus is on initial support near the March 2020 / 2022 highs at 1.1497- watch this week’s close with respect to this level. Medium-term bullish invalidation now rests with the April high-week close (HWC) at 1.1365- note that the 75% parallel converges on this threshold and losses below this slope would threaten a larger correction towards the median-line. Subsequent support seen at the May low-week close (LWC) / 2024 high-close at 1.1163/91 and 1.1038/76- a region defined by the December HWC and the 38.2% retracement of the yearly range. Look for a larger reaction there IF reached.

A breach / weekly close above 1.1616 would threaten uptrend resumption towards subsequent resistance objectives at the 78.6% retracement of the 2021 decline at 1.1747 and the 100% extension of the 2022 advance at 1.1917- both levels of interest for potential topside exhaustion / price inflection IF reached.

Bottom line: Euro is testing uptrend resistance on building momentum divergence with the Federal Reserve interest rate decision on tap later today. From a trading standpoint, any 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.

Keep in mind we get the release of the Fed’s updated quarterly economic projections on growth, inflation, and unemployment. Stay nimble into the release and watch the weekly close 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

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.