Euro, EUR/USD Talking Points:
- EUR/USD put in a strong breakout last Wednesday after the release of US CPI data.
- Since then, however, the pair has been on its back foot, but sellers haven’t exactly been able to run freely either as price is putting in a bounce from a spot of possible higher-low support.
- I’ll be discussing these themes in-depth in the weekly webinar. It’s free for all to register: Click here to register.
EUR/USD strength has been ongoing for more than a month now. The pair found support near the lower-end of a range that’s been in-play since the 2023 open and since then, bulls have been going to work.
Initially the move was somewhat tepid, with resistance holding at prior support around 1.0725. That lasted into the end of May with the pair finally getting a boost around the FOMC rate decision on the first of the month. The NFP report a couple days later is what seemed to give bulls the confidence to make a push, and that saw resistance play-in at the 200-day moving average.
The pullback from that remained as constructive with support showing at prior resistance, and bulls took over around the release of CPI last week, pushing a strong breakout up to a fresh monthly high. Since then, however, prices have continued to pullback albeit in a somewhat concentrated fashion.
As a matter of fact, if you compare the current pullback to the scenario that was setting up ahead of last week’s open, there would be some similarity. This, of course, doesn’t mean that we’ll see the same type of outcome, but it’s noteworthy that sellers have had an open door to prod a larger pullback for a week now and so far, haven’t taken control.
EUR/USD Daily Price Chart
Chart prepared by James Stanley, EUR/USD on Tradingview
EUR/USD: The Test for Bulls
At this point it feels almost like a begrudgingly bullish trend, but there remains support structure that could keep the near-term trend in bulls’ hands.
The first spot of support that I talked about in yesterday’s webinar is already in-play at 1.0835. Below that is another spot of interest at 1.0807, which is the 38.2% retracement of the recent sell-off. And below that is the 200-day moving average which currently projects to around 1.0787.
That would be the major spot that would need to be defended by bulls to retain control of the near-term trend. Below that price, the next major zone of support is the same that was in-play before the prior pullback, around the 1.0725 level.
EUR/USD Four-Hour Price Chart
Chart prepared by James Stanley, EUR/USD on Tradingview
--- written by James Stanley, Senior Strategist
