Euro Short-term Outlook: EUR/USD Holds Lows – Breakout Risk Builds
EUR/USD steadies after a sharp decline, holding near support as traders watch for a potential breakout. Battle lines drawn on the Euro short-term technical charts.
Share this:
Euro Technical Outlook: EUR/USD Short-term Trade Levels
- EUR/USD plunges more than 3.1% from uptrend resistance at four-year highs
- Euro rebounds off downtrend support- weekly opening-range breakout imminent
- Resistance 1.1625, 1.1645, 1.1686 (key)- Support 1.1565, 1.1505/14 (key), 1.1392
The Euro has stabilized after a steep decline from the yearly highs, with EUR/USD holding above downtrend support into the weekly open. While the broader outlook remains bearish, the pair is consolidating within a tight range, and a breakout of the weekly opening range may confirm the next directional move. Battle lines are 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 EUR/USD was, “testing support at the August trendline with the weekly opening-range preserved just above. Looking for a breakout in the days ahead for guidance. From a trading standpoint, rallies should be limited to the weekly high IF EUR/USD is heading for a break lower on this stretch with a close below 1.1687 needed to fuel the next major leg of the decline.” Euro has now plunged more than 3.1% off the September highs with the bears rebounding off channel support last week at two-month lows. The risk remains tilted to the downside while within this formation with immediate focus on a breakout of the weekly opening-range for guidance in the days ahead.
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 trading within the confines of a proposed descending pitchfork extending off the yearly highs with price rebounding off the lower parallels last week. Weekly-open resistance is eyed at 1.1625 and is backed closely by the September 25 swing low at 1.1645. Near-term bearish invalidation is now lowered to the 38.2% retracement of the September sell-off at 1.1686- note that the upper parallel converges on this threshold over the next few days and a break / close above this slope would be needed to suggest a more significant low is in place / a larger reversal is underway. Subsequent resistance eyed at the objective monthly open at 1.1733 and the 61.8% retracement at 1.1775.
Initial support rests with the October low-day close at 1.1565 with a break below the weekly opening-range exposing key support at the 100% extension of the September decline / April high-day close (HDC) at 1.1505/14- an area of interest for possible downside exhaustion/ price inflection IF reached. Subsequent support seen at the May HDC / August low at 1.1386/92.
Bottom line: A rebound off downtrend support keeps the focus on a breakout of the weekly opening-range for guidance here. From a trading standpoint, rallies should be limited to 1.1686 IF price is heading lower on this stretch with a break below the 1.15-handle needed to fuel the next major leg of this decline.
Note that markets will be closely monitoring the escalating China trade dispute as concerns mount about President Xi’s move to restrict exports of rare earth minerals and magnets. We also get the releases of key inflation data next week from the Eurozone and the U.S. next week – stay nimble here and watch the weekly closes 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
- Canadian Dollar Short-term Outlook: USD/CAD Breaks to Six-Month High
- Australian Dollar Short-term Outlook: AUD/USD Crashes Toward Support
- Japanese Yen Short-term Outlook: USD/JPY Breakout Rips to Resistance
- US Dollar Short-term Outlook: USD Bulls Eye Pivotal Resistance Test
- British Pound Short-term Outlook: GBP/USD Facing Support– Risk Mounts
- Gold Short-term Outlook: XAU/USD Overbought Rally Hits Record Highs
- Swiss Franc Short-term Outlook: USD/CHF Faces Make-or-Break Resistance
--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on Twitter @MBForex
Latest market news
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/JPY Weekly Outlook: AI earnings could overshadow the Fed and BoJ
AI sentiment has become a major driver of US Treasury yields and USD/JPY. With Microsoft, Alphabet and Amazon reporting this week, central bank decisions may have competition for traders' attention.
US Dollar Price Action Setups: EUR/USD, USD/JPY, GBP/USD, USD/CAD
The Dollar is working on its second consecutive red week and while sellers didn’t exactly pounce on fresh lows, there’s an opening door for bears to make a move.
Silver forecast: metals liquidation drags XAG/USD into $50-55 support
Silver has broken its July low and slipped into a long-term support zone as the selling in precious metals deepens. The chart shows where the metal could bottom, and next week's Fed decision may decide whether it does.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.