Euro Technical Forecast: EUR/USD Bulls Emerge at Trend Support

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro surges into monthly open after rebounding off uptrend support at multi-month lows
• EUR/USD risk remains for a larger recovery while with price now testing initial resistance
• Resistance 1.1641, 1.1747/75 (key), 1.1917-1.2020 - Support 1.1497-1.1537 (key), 1.1394, 1.1228/54

The Euro rebounded off uptrend support into the November open with EUR/USD poised to mark a second consecutive weekly advance. Price is testing the first area of resistance, and the reaction here will be critical in determining whether a more sustained recovery can take hold. Battle lines drawn on the Euro weekly technical chart.

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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 was testing a near-term inflection zone around the 1.16-handle with, “a weekly close below needed to fuel the next leg of this pullback. From a trading standpoint, rallies should be limited to 1.1734 IF price is heading lower on this stretch with a close below 1.1497 needed to fuel the next leg of the decline.” Euro broke lower the following week with the losses extending nearly 3.8% off the yearly high. Despite registering an intraweek low at 1.1469, price was unable to mark a close below 1.1497. The subsequent rebound has now extended more than 1.6% off the November low and the focus is now on whether the rally marks resumption of the broader uptrend or a brief pause within a larger pullback.

Initial resistance is being tested today at the 38.2% retracement of the September decline at 1.1641 with key resistance is eyed at 1.1747/75- a region defined by the 2025 high-week close (HWC), the 61.8% retracement, and the yearly high-close. A breach / weekly close above this threshold is needed to mark uptrend resumption with subsequent resistance objectives eyed at the yearly swing high, the 100% extension of the 2022 advance and the 38.2% retracement of the 2008 decline at 1.1917-1.2019. Note that the upper parallel converges on this zone into the close of the year- look for a larger reaction there IF reached.

Weekly support rests 1.1497-1.1537- a region defined by the March 2020 & 2022 highs, the 78.6% retracement of the July rally, and the objective monthly open. A break / weekly close below this threshold would 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.

 

Bottom line: Euro rebounded off uptrend support with the recovery now testing initial resistance- watch the weekly close with respect to 1.1641. From a trading standpoint, losses should be limited to 1.1537 IF price is heading higher on this stretch with a close above 1.1775 ultimately needed to mark resumption of the broader uptrend.

Keep in mind that the economic docket remains light this week with, yet another key inflation read (CPI) delayed on account of the government shutdown. Although the government has now officially reopened, it will take time for key data releases to catch up after such a prolonged pause with officials now suggesting the October jobs & inflation data may never be recovered. In the meantime, a continued flurry of Fed speakers are scheduled tomorrow, and traders will look for insight into how policymakers view the rate path into year-end after weeks of limited data. Note that interest rate expectations for December have plunged with Fed fund futures now pricing the probability of a cut next month at 50%. Despite this shift in the outlook, the US Dollar remains under pressure - watch the weekly closes for guidance here. 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