Euro Short-term Outlook: EUR/USD Hits Trend Resistance- Reversal Risk
Euro surged nearly 3% off the August low with the rally reversing sharply off downtrend resistance today. Battlelines drawn on the EUR/USD short-term technical charts.
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Euro Technical Outlook: EUR/USD Short-term Trade Levels
- Euro rebound extends nearly 3% off monthly low- rally halted at downtrend resistance
- EUR/USD weekly range breakout pending- U.S. retail sales / consumer confidence on tap
- Resistance 1.1706/26, 1.1787-1.1805 (key), 1.1917- Support 1.1601, 1.1521, 1.1460 (key)
The Euro recovery stalled at a critical barrier with EUR/USD testing multi-week trend resistance following a 2.9% rally off the August low. This level marks a key inflection point for near-term price action and while the broader rebound remains intact, the pair’s trajectory will hinge on whether bulls can break through this slope. Battle lines drawn on the Euro short-term technical charts.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this EUR/USD technical setup and more. Join live Monday’s at 8:30am EST.
Euro Price Chart – EUR/USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Technical Outlook: In last month’s Euro Short-term Technical Outlook we noted that, “A break below the February uptrend threatens a larger breakdown in EUR/USD.” The Fed sell-off and subsequent NFP rebound into the monthly cross saw price surge nearly 3% off the early-August low. EUR/USD exhausted into resistance yesterday at the July downtrend and the bulls may be vulnerable here while below this slope.
Euro Price Chart – EUR/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Notes: A closer look at Euro price action shows EUR/USD responding to resistance yesterday with the pullback erasing the weekly gains. The weekly range is set just above the 38.2% retracement of the August rally at 1.1601- look for a breakout in the days ahead.
Subsequent support seen at the 61.8% retracement at 1.1521 and the 61.8% extension of the July decline at 1.1460- both levels of interest for possible downside exhaustion / price inflection IF reached. Key support rests with the objective monthly open / May high-day close (HDC) at 1.1386-1.1415- losses below this threshold would threaten downtrend resumption towards the next technical consideration near 1.1276/92.
Resistance is eyed with the August HDC / 76.4% retracement of the July decline at 1.1706/26 and is backed by the July open / 2025 HDC at 1.1787-1.1805- a break / daily close above this threshold is needed to mark resumption of the broader uptrend with subsequent resistance objectives eyed at the 100% extension of the 2022 advance at 1.1917 and the 1.618% extension of the yearly advance at 1.1990.
Bottom line: A two-week rebound has exhausted into multi-week downtrend resistance with the weekly range intact just below- the immediate focus is on a breakout of 1.16-1.1726. From a trading standpoint, the monthly advance remains vulnerable while below today’s high - losses would need to be limited to 1.1460 IF price is heading higher on this stretch with a close above 1.18 ultimately needed to fuel the next leg of the advance.
Keep in mind we get the release of U.S. retail sales and consumer sentiment tomorrow with the Jackson Hole World Economic Symposium on tap next week. Stay nimble into the releases and watch the weekly close here for guidance. Review my latest Euro Weekly Technical Forecast for a closer look at the longer-term EUR/USD trade levels.
Key EUR/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts
- British Pound Short-term Outlook: GBP/USD Threatens July Downtrend
- Japanese Yen Short-term Outlook: USD/JPY Tests Uptrend Support
- Canadian Dollar Short-term Outlook: USD/CAD Coils Within July Uptrend
- Australian Dollar Short-term Outlook: AUD/USD Recovery at Resistance
- Gold Short-term Outlook: XAU/USD Rebound Testing Key Resistance
- Swiss Franc Short-term Outlook: USD/CHF Pullback Eyes Uptrend Support
--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on Twitter @MBForex
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