Euro Technical Forecast: EUR/USD NFP Plunge Testing Trend Support

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• Euro snaps two-week winning streak- marks six-day sell-off on strong NFPs
• EUR/USD now testing major support pivot at June uptrend- CPI on tap next week
• Resistance 1.1038, 1.1135 (key), 1.1228/75– Support 1.0942/80 (key), 1.09, 1.0835

Euro plunged more than 1.7% this week with EUR/USD closing a sixth consecutive-daily decline on the heels of a blowout NFP print on Friday. The sell-off takes price into a pivotal support zone and threatens the multi-month uptrend- battle lines drawn on the EUR/USD weekly technical chart.

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 EUR/USD, “technical outlook remains constructive, the immediate advance may be vulnerable into key resistance just higher. Risk for a deeper pullback within the uptrend- be on the lookout for signs of downside exhaustion in the weeks ahead. From a trading standpoint, losses would need to be limited to the June slope / 1.0942 IF price is heading higher on this stretch with a close above 1.1275 ultimately needed to mark uptrend resumption.”

Euro briefly registered an intraweek high at 1.1214 two-weeks later before exhausting with this week’s reversal marking the largest weekly-decline since September 2022 and the largest weekly-range since April. Both instances marked notable turns in trend within the following week.

The immediate focus is on a reaction into confluent support here at the 1.0942/80- a region defined by the January high-week reversal close and the 38.2% retracement of the 2024 yearly range. Note that basic channel support converges on this threshold and a break / close below this pivot zone is needed to invalidate the June uptrend / suggest a more significant high was registered last month. Subsequent support objectives eyed at the 1.09-handle and the 61.8% retracement / 52-week moving average around 1.0835/55- look for a larger reaction there IF reached.

Initial weekly resistance is eyed with the objective yearly open at 1.1038 and is backed the October open / December high at 1.1135/39- we will reserve this threshold as our near-term bearish invalidation level with a break / close above key resistance at 1.1228/75 ultimately needed to mark uptrend resumption.

Bottom line: A six-day sell-off takes EUR/USD into confluent technical support and challenges the June uptrend. From a trading standpoint, rallies would need to be limited to the monthly open IF price is heading for a larger correction here with a close blow 1.0942 still needed to fuel the next leg lower.  

Keep in mind we get the release of the FOMC minutes and a fresh batch of inflation data next week with the US Consumer Price Index (CPI) on tap Thursday. The October opening-range is taking shape just above key support- look for a breakout in the days ahead and 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, Sr Technical Strategist

Follow Michael on X @MBForex